The phrase “I came out of the frying pan into the fire” comes to mind when the FTSE falls and rises on Thursday. The UK index took some comfort from the development of the day.
Between the first bit of long-standing vaccine-related optimism and patch-up of Prime Minister Rishi Sunak’s new support scheme, the FTSE recovered when it reached 5,726 points from its five-month low.
Speaking about the day-to-day index movement, Connor Campbell of Spreadex Financial Analyst said: “The midday rebound appeared to be linked to the good news of the Oxford vaccine trial, with reports that it was promoting a ‘strong immune response’ in patients. ”
“There was then an announcement from Rishi Sunak that the government is expanding its Furlough exchange scheme by launching a new grant scheme for businesses under tier 2 restrictions, while making changes to the level of employer contributions under tier 2 restrictions and the number of hours employees need to work to be eligible.”
In this news, the FTSE 100 went from the first 50-point drop to 5,785 from the rally at the end of the day, about 10 points (0.16%). More bullish was the FTSE 250. It fell by more than 100 points from the start, with the index convening 0.60% of the meetings, up to 17,894 points.
However, the broader outlook is less positive than today’s development suggests. There is room for even more downward pressure between now and Christmas as there is no clear news about when a vaccine is expected and changes in political policy will make it difficult to price another potential lockdown. Campbell adds the development of the day:
“However, this has only had a limited impact on investor disposal. The market is deeply concerned by the extent and size of the rise in Covid-19 cases and subsequent restrictions around the world, particularly in Europe.”
This worry was reflected in Eurozone stocks, with DAX down 0.12% to 12,543 points and CAC is doing its best to recover, but ultimately ended at 4,851 points with a marginal DIP of 0.053%.
