The FTSE 100 rose in early trade on Monday as major global moved to ease lockdown measures to help restart economies.
The FTSE 100 traded as much as 0.9% higher at 5,994 in the first hour of trade on Monday, before selling off to turn negative on the day.
London’s leading index was closed on Friday and missed a strong session in the US following the release of the monthly US jobs report. US Non-Farm payrolls recorded a drop of 20.5 million jobs in the United States in April, which was marginally better than the expected 21.5 million.
The better than expected figure sparked a rally in global equities and followed through to a strong session on Monday in Europe. A stronger jobs report. although abysmal, analysts looked through the numbers to a potential recovery.
“Going in we knew we were going to see staggering job losses. But what we are looking at are temporary job losses, which gives us hope that those jobs could come back. But overall it’s a bleak report,” said Charlie Ripley, Senior Market Strategist at Allianz.
The post Non-farm payrolls rally built on steady gains last week that materialised as major global economies began to reopen their economies.
The UK was the latest country to lay down plans for a gradual easing of lockdown measures as Boris Johnson changed his message to ‘stay alert’ in a speech on Sunday.
In a speech highly criticised for its lack of clarity, Johnson said some workers could begin to return to work and people were allowed to take unlimited exercise.
The Prime Minister also announced a 14-day quarantine for people flying into the UK.
This hit the UK’s listed airlines with easyJet over 7% weaker and IAG shedding 2.5%. Ryanair was down 1.5%.
Johnson Matthey was the FTSE 100 risers as the lockdown easings increased the prospect of higher levels of car manufacturing.
Despite the potential for increased economic activity, there are warnings the recovery may not be as sharp as people had previously thought.
“The market’s confidence in positive news on coronavirus is looking overly optimistic and there is a sizeable risk that the opening up of the economy will be much slower than many people think. But we do expect the trough to be reached in the second quarter of the year, followed by significant improvement in corporate earnings in the second half,” said Ewout van Schaick, Head of Multi Asset at NN Investment Partners.