Freedom Day, 19 July, is finally here, but the UK stock market is not in a celebratory mood. The FTSE 100 is down by 1.94% during the morning session 6,872.38, well below the 7,000 mark it worked so hard to get above earlier this year.
“There is no ticker tape parade, cheers from the rooftops or people dancing in the streets as Freedom Day finally comes,” says Russ Mould, investment director at AJ Bell.
“Many of the stocks leading the UK stock market downwards are related to travel and leisure, suggesting that investors are extremely worried that we’ve lifted restrictions too soon and that another lockdown could be a month or two round the corner,” Mould added.
Covid is on the rise again and air travel firms, restaurants and other leisure companies may not get the positive summer period they have been crossing their fingers for. “The fact Cineworld is down 8%, Carnival falling 7% and Restaurant Group 4% implies that investors think the reopening trade is now a dud,” said Mould.
While many have been vaccinated, they are also finding out that the jab does not make them invincible, as cases begin to rise, or people are getting told to go into isolation.
“Pictures from UK airports would suggest some increase in flying but certainly nowhere near the levels one might have expected a few months ago. Then, everyone was talking about their big plans to celebrate once Freedom Day came around, and now it’s proved to be a damp squib.”
“The big concern for the market is whether we going to see a slowdown in the global economic recovery, and this could be the overriding force which results in a bad period for equities in the weeks ahead.”
FTSE 100 Top Movers
It’s never good news when only a handful for of companies are in the green. Today, on a dismal day for the FTSE 100, 3i Group, up 0.19%, is the only riser.
At the bottom end of the index out of the other 99 companies, Rolls-Royce (-4.25%), St James’s Place (-3.97%) and Glencore (-3.75%) are the top fallers on the FTSE 100.