Business

LONDON — Europe's major stock markets advanced on Wednesday as investors drew strength from easing Omicron virus concerns and shrugged off a mixed performance on Wall Street and in Asia.

US stocks were mixed in early trading as traders awaited the minutes of the latest Federal Reserve meeting that could signal when the central bank is likely to hike interest rates.

Traders have grown wary of the Fed, which has indicated it may hike rates repeatedly next year to curb inflation, potentially dampening the US stock rally enjoyed throughout the COVID-19 pandemic.

London firmed 0.1 per cent, while Frankfurt jumped 0.7 per cent to come within a whisker of its all-time high, and Paris won 0.8 per cent as it pushed further into record territory.

On Wall Street, the Dow continued to climb from its record closing high at the opening bell on Wednesday, but both the S&P 500 and the tech-heavy Nasdaq Composite moved further lower.

Markets wavered in Asia after a tepid overnight Wall Street lead, with inflation and expected interest rate hikes returning to the fore as Omicron fears ease.

In foreign exchange, the dollar slid versus the euro before minutes from the US Federal Reserve's latest interest rate meeting.

Oil rose further after climbing on Tuesday, when the Organisation of the Petroleum exporting Countries and its allies agreed as expected to raise output by 400,000 barrels per day in February.

"Overall, risk appetite remains positive," said ThinkMarkets analyst Fawad Razaqzada.

"The biggest driver behind this is relief that Omicron is not as deadly as Delta, which is fuelling expectations that travel restrictions and lockdowns will be lifted soon."

Omicron relief rally 

While the new COVID variant continues to spread rapidly around the world, forcing governments to maintain containment measures, its apparently milder symptoms have also allowed traders to focus more on future economic policies and plans to rein in surging prices.

China tech sector weighs 

Chinese technology firms, which have been hit by a crackdown from China's government, were a big drag on Hong Kong as it sank more than one per cent.

Concerns about a new COVID outbreak in the city that has led to the reimposition of containment measures added to the glum mood.

Shanghai stocks also slid but Tokyo clung onto positive territory.

In company news, China Mobile briefly soared around 10 per cent on its debut in Shanghai after the telecoms giant was delisted in New York under a standoff between Beijing and Washington. It ended only slightly higher, however.

The share offer is expected to raise $8.8 billion after the company exercises an over-allotment option, according to Bloomberg News, making it the largest on China's domestic stock markets for more than a decade.

NEW YORK — Japanese carmaker Toyota led US automobile sales in 2021, according to figures released on Tuesday, overtaking General Motors (GM) for the first time as a shortage of semiconductors roils the car industry.

The shift atop the rankings came after a year in which assembly lines were plagued by scarcity of the crucial computer chips, resulting in steep fourth-quarter sales declines for both companies.

But Toyota still managed to grow annual sales in the United States by 10.4 per cent to 2.3 million, while General Motors suffered a 12.9 per cent drop to 2.2 million.

Toyota, which has been credited with better management of the chip issue compared with some rivals, saw small annual gains for two top-selling sedans, the Camry and the Corolla, and a modest dip in sales of its Rav4 compact SUV. Its full-sized Highlander SUV scored higher sales in 2021.

GM, which relies more heavily on trucks than Toyota, saw an annual 10.8 per cent drop in its Silverado pickup trucks and a 6.4 per cent fall in its GMC truck line.

GM has held the crown as the number-one company in US auto sales since 1931, when it supplanted Ford, according to trade publication Automotive News.

Charlie Chesbrough, senior economist at Cox Automotive, noted that GMs' de-emphasis of sedans has cost it some market share, and characterized Toyota's ascendance as a "significant event" given GM's longtime leadership.

In a market starved of inventory, Toyota also may have benefitted from a smaller dealer network compared with GM, Ford and Stellantis, which owns the Chrysler brands, he said.

"The larger dealer networks of GM/Ford/Stellantis may have faced a greater challenge of keeping the right product in the right market for the right buyer," Chesbrough said in an email. "And, as a result, sales may have been trimmed because buyers couldn't find the product they wanted." 

Semiconductor struggle 

Cox has projected 2021 US sales of 14.9 million, up 2.5 per cent from the 2020 level but much below the five-year average. The consultancy has pointed to strong demand but anemic inventories, saying "demand is healthy but... you can't sell what you don't have".

A shortage in semiconductors has been one of the emblematic supply chain problems of the COVID-19 pandemic.

Analysts have cited outsized demand for electronics as a factor, but automakers have also seen supplies of the component affected by closures at factories in Asia due to COVID lockdowns or fires at manufacturing sites. 

Among other companies reporting sales, Honda scored an 8.9 per cent rise in US sales last year to 1.5 million vehicles, and Hyundai won a 19 per cent increase to 738,081 autos.

While GM has acknowledged that low car inventories are a problem, Chief Executive Mary Barra and other executives have touted strong vehicle pricing, which has enabled it to remain profitable even as sales sag. 

GM's inventories recovered somewhat during the quarter, finishing December at just under 200,000. That is about 55 per cent more than three months earlier, but less than half the level of a year ago.

"The key constraint for sales continues to be reduced inventory levels as a result of the semiconductor shortage. Those inventory levels are beginning to recover," said GM Chief Economist Elaine Buckberg.

"Consumers want to drive as much as before the pandemic, based on recent high levels of vehicle usage. High vehicle usage and deferred sales mean pent-up demand for new vehicles in the millions and building. That pent-up demand will support sales as vehicle supply improves."

The final tally for 2021 comes as US auto giants double down on electric vehicle investments. On Wednesday, Barra is scheduled to deliver a virtual keynote speech at the Consumer Electronics Show to unveil an electric version of the Silverado.

In a statement, Toyota pointed to $3 billion in new US investments targeting EV development, while Ford said Tuesday it will nearly double production capacity for the electric version of its top-selling F-150 pickup truck.

LONDON — Stock markets rallied on Tuesday to fresh record highs as investors bet on reduced economic fallout from the Omicron variant, while oil prices pushed higher as OPEC and its allies raised output.

Traders kept a close watch also over high inflation concerns.

London kicked off its 2022 trading with strong gains for the travel sector that helped push the FTSE 100 above 7,500 points for the first time, while the British pound reached a near two-year high versus the euro.

"The FTSE 100 has set off on a sprint of New Year optimism, shaking off worries of inflation and concerns about the Chinese property market," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"Stocks reliant on international travel are powering ahead, with British Airways owner, International Consolidated Airlines Group, rising 7 per cent in early trade."

While COVID variant Omicron is spreading like wildfire around the world, it appears to be far less severe than initially feared, raising hopes that the pandemic could be overcome and life return to more normality.

"The biggest driver behind the stock market rally and risk appetite in general is relief that Omicron is not as deadly as Delta, which is fuelling expectations that travel restrictions and lockdowns will be lifted soon," said Fawad Razaqzada, market analyst with ThinkMarkets.

However, inflation, supply chain snags, central bank policy tightening and geopolitical woes continue to weigh on sentiment and analysts have warned that the blockbuster stock market gains seen in recent years could be tougher to attain.

Despite the strong start, "we expect 2022 to be far more challenging from an investment perspective", said Heather Wald of Bel Air Investment Advisers.

"Rarely has a market delivered three consecutive years of double-digit returns, as we have seen from 2019-2021."

European and Asian equity markets enjoyed strong gains on Tuesday, with the CAC 40 striking a new intraday records, following fresh record closes on Monday on Wall Street.

US stocks pushed further higher at the opening bell on Tuesday, with both the Dow and S&P 500 striking fresh all-time highs.

OPEC+ hikes output 

Investors were looking ahead also to Wednesday's release of minutes from the Federal Reserve's December policy meeting, hoping for insight into its plans amid surging inflation, that is forcing central banks to wind back pandemic stimulus and raise interest rates.

The Fed has already started tapering its bond-buying programme and the focus is now on what it will do with interest rates, with some commentators predicting three hikes before 2023.

Elsewhere, OPEC and its allies, as expected, maintained their practice of modestly increasing oil output every month as the rapidly spreading Omicron variant has so far not heavily hit demand.

The OPEC+ grouping, including top producers Saudi Arabia and Russia, has resisted US pressure to more widely open the taps as high energy prices are fuelling a surge in inflation across the world.

The 13 members of the OPEC cartel and their 10 allies drastically slashed output in 2020 as the pandemic wreaked havoc with demand.

Last year, they decided to step it up again gradually as prices recovered, while reviewing the situation every month.

After a short videoconference meeting on Tuesday, the group said it had agreed to raise output by 400,000 barrels per day in February, the same level as in previous months.

The club's members approved a previous hike at their December meeting despite the emergence of Omicron, which had caused prices to fall as markets fretted over its potential impact on the global economy.

The December decision earned the thanks of the White House, nervous of the effect of rising prices at American petrol stations, but it did not prevent crude prices from recovering considerably from their previous slump.

The price of Brent, Europe's benchmark oil contract, hit $79.76 at 13:25 GMT on Tuesday — 15 per cent higher than before the group's December 2 meeting.

OPEC analysts told the group on Monday that Omicron would have a moderate impact on demand and the rise in price is expected to continue in 2022.

While the new COVID variant is spreading like wildfire around the world, it appears to be far less severe than initially feared, raising hopes that the pandemic could be overcome and life return to a little more normality.

Iran exports 

While OPEC+ countries have been gradually increasing output again since last year, analysts note some countries, such as Nigeria and Angola, have been struggling to lift production.

"Important here is that Russia did not lift production in December which could be a sign that they are getting closer to their capacity," SEB chief commodities analyst Bjarne Schieldrop said.

Another heavyweight, Iran, has seen its exports limited by US sanctions.

Talks to revive a deal, which curbed Iran's nuclear activities in exchange for sanctions relief, are underway in Vienna.

They have dragged on since last year but negotiators are pushing to conclude the talks to get the 2015 landmark agreement back on track.

It was thrown into disarray in 2018 when the US withdrew from the accord.

LONDON — The price of bitcoin hit record highs in 2021, thanks to support from traditional finance, but cryptocurrency specialists are struggling to predict next year's outcome for the volatile sector.

Having more than trebled in value to $60,000 between December 2020 and April, bitcoin has lost some shine to trade at under $50,000 heading into the new year.

"The current choppy and directionless price action with a possibility of further pressure to the downside has introduced a lot of uncertainty to the digital asset market," noted Loukas Lagoudis, executive director at cryptocurrency investment fund ARK36.

He added, however, that "sustained adoption of digital assets by institutional investors and their further integration into the legacy financial systems will be the main drivers of growth of the crypto space" during 2022. 

'No certainty in crypto' 

Bitcoin's rise in 2021 coincided with Wall Street's growing appetite for cryptocurrency.

The record high in April occurred with the stock market debut of cryptocurrency exchange Coinbase.

October's peak above $66,000 followed the launch of a bitcoin futures exchange-traded fund, or type of financial instrument, on the New York Stock Exchange.

Tesla boss Elon Musk helped the market rise — and fall — with controversial tweets about cryptocurrencies.

The move by El Salvador in September to make bitcoin a legal tender also made an impression.

But pressure has come from China's crackdown on the trading and mining of cryptocurrencies, while the risk of wider regulatory action, from the likes of Europe and the United States, weighs on bitcoin.

"There is no certainty in crypto, never mind regulation," said Huong Hauduc, general counsel at digital assets exchange Bequant.

"However, one thing is certain, the voices calling for crypto regulation, whether …for tighter consumer protection or just clarity of the rules for institutions, are getting much louder."

Created following the 2008 global financial crisis, bitcoin initially promoted a libertarian ideal and aspired to overthrow traditional monetary and financial institutions such as central banks.

In more recent times, climate change watchers have shone a spotlight on the huge amount of electricity used to power computers required to unearth new bitcoin tokens.

More competition 

Bitcoin is at risk of increased competition as it enters 2022, especially from its closest rival ethereum, according to some analysts.

In November, Twitter co-founder and CEO Jack Dorsey announced his departure from the social media platform, leaving him to concentrate on his digital payments firm as it looks to expand into cryptocurrency.

For now, bitcoin remains the dominant player.

According to the specialised site CoinGecko, the cryptocurrency sector has a market value totalling $2.36 trillion, with bitcoin worth a combined $900 billion.

For analyst Frank Downing, "bitcoin's reluctance to evolve its design" compared to the likes of ethereum, is in fact "a feature that provides the stability and consistency required to serve as a true global money".

WASHINGTON — Air travel continued to be severely disrupted in the United States on Saturday, with bad weather in parts of the country adding to the impact of a massive spike in COVID-19 infections fuelled by the Omicron variant.

The United States had 2,723 cancelled flights, more than half of the 4,698 cancelled worldwide, around 11:00 pm (04:00 GMT Sunday), according to tracking website FlightAware. 

In addition, 5,993 domestic flights were delayed on Saturday, out of a total of 11.043 worldwide for the day.

The worst affected US airline was SkyWest, which had to cancel 23 per cent of its flight schedule, according to the site.

In the United States, airports in Chicago were particularly hard-hit because of bad weather, with a snowstorm expected in the area on Saturday afternoon and into the night.

The global air travel industry is still reeling from the highly contagious Omicron variant.

Many pilots, flight attendants and other staff are absent from work after contracting COVID-19, or because they are quarantining after coming in contact with someone who has the infection.

Some 7,500 flights were cancelled by airlines worldwide over the Christmas weekend. 

NEW YORK — Shares of Biogen surged on Wednesday following a report that South Korean giant Samsung Group is in talks to acquire the US biotech company for more than $40 billion.

Biogen, which is known for its Alzheimer's drug Aduhelm and a neurology-focused medication pipeline, approached Samsung on a potential deal that could be valued at more than $42 billion, according to a report in the Korea Economic Daily.

The report, which cited unnamed investment banking sources, noted Biogen's relatively stable revenue in comparison with "cyclical industries like semiconductors," which have driven profit at Samsung.

Shares of Biogen soared 9.5 per cent in Wednesday's session to $258.31 and climbed further in after-hours trading.

A Biogen spokeswoman declined comment.

Founded in 1978 by a team that included Nobel Prize winners Walter Gilbert and Phillip Sharp, Biogen is known for medicines to treat multiple sclerosis in addition to Aduhelm.

The company, based in Cambridge, Massachusetts, had revenues of $13.4 billion last year and finished 2020 with about 9,100 employees.

Shares of Biogen have fallen nearly 50 per cent from its June peak due in part to doubts about the efficacy of Aduhelm. On December 20, Biogen announced that it was slashing the price of the drug roughly in half.

The world's top chipmaker, Samsung is best known for its electronics division, which reported a 28 per cent jump in operating profit in the most recent quarter to 15.8 trillion won ($13.5 billion).

Biogen and Samsung Biologics currently have a joint venture to develop, manufacture and market biosimilars.