Widespread speculation that England will delay lockdown easing hasn’t troubled markets, with the FTSE 100 up 0.39% to 7,167.
“That puts the UK index at its highest level since February 2020, but there is still some way to go to hit the 7,400 levels seen before Covid triggered a global market crash,” says Russ Mould, investment director at AJ Bell.
“Many other major stock markets in the world have already recovered all of their Covid crash losses and since rallied to considerably greater heights, including the S&P in the US and the Nikkei 225 in Japan.”
Driving the UK market on Monday were oil stocks, consumer goods firms, overseas-focused banks and pharmaceutical companies, with Unilever the largest driver for the index in points terms.
“These movements would suggest that investors are focusing on companies that do business beyond the UK, taking a positive view on the global economy,” said Mould.
“Gold fell back 1.1% to $1,858 as some investors lost interest in safe-haven assets, pulling down shares in precious metal miners Polymetal and Fresnillo.”
Leisure companies could be worst affected by any delay to lockdown easing in England as it will require a continuation of the social distancing rules, meaning pubs and restaurants can’t operate at full capacity.
“However, investors don’t seem too bothered by the risk, perhaps because speculation points to a mere four-week delay, albeit during a seasonally busy time. Pubs group Marston’s slipped 0.5% while Restaurant Group was unmoved,” Mould said.
“Airlines fared worse as any cautious tone by the Government doesn’t bode well for relaxing guidance on foreign travel. The travel sector is waiting with bated breath to start taking more passengers overseas, but hopes are fading for widespread flying this summer. International Consolidated Airlines fell 2.3% while EasyJet dropped 1.8%.”
FTSE 100 Top Movers
BT (2.55%), Halma (2.12%) and Just Eat (2.06%) are leading the way early on Monday.
While at the bottom end of the FTSE 100 is Rolls-Royce (-3.18%), IAG (-2.62%) and Polymetal International (-1.62%).