Somewhat predictably, global equities sprung back from Monday’s painful losses, with European indices booking some modest gains in the early stages of trading.
Up 0.74% to 12,635 points, the DAX led the tired charge, having posted the biggest loss on Monday, down 4.37%. Following them was the CAC, up 0.13% to 4,798 points, having dropped 3.74% the day before.
Nestling its way in-between its European cousins was the FTSE, up 0.22% to 5,817. Having fallen by 3.38% on Monday, it appears unlikely the FTSE 100 will regain its 6,000 point footing in the coming days, save for some change in fortune as far as a looming Covid second wave is concerned.
Perhaps more accurately representing the economic situation and the sentiment in global equities as a whole, the FTSE 250 opened to a 0.50% drop, before recovering to minus 0.34%. This tells the story of a hospitality sector under unprecedented pressure, with the new 10pm pubs and restaurants curfew, and the possibility of a second lockdown likely to be more than many businesses can shoulder.
Today, the mood of the FTSE indexes reflected the mixed set of results being published – for instance those posted by Kingfisher (LON:KGF) and Whitbread (LON:WTB). Speaking on the two companies, Spreadex Financial Analyst, Connor Campbell, said:
“Two Tuesday updates captured the varying fortunes of UK firms on a sector-by-sector basis. Whitbread – which covers not one, but two badly hit areas with its hotel and restaurant chains – revealed it was cutting 6000 jobs after an 80% first half drop in sales. Investors sent the stock 3% lower in response.”
“In contrast, B&Q-owner Kingfisher blasted past first half forecasts, posting a 23% surge in adjusted pre-tax profit to £415 million – £36 million more than analysts had estimated – as like-for-like sales aggressively rebounded in Q2, climbing 19.5% after a 24.8% contraction in Q1. Crucially that momentum also has carried into Q3 (to date), with LFLs up 16.6%. This as UK customers were drawn to DIY for a variety of reasons, from turning the home into an office and/or classroom, to simply finding something to do. With investors understandably impressed by Kingfisher’s handiwork, the stock jumped close to 7%.”
Elsewhere in global equities, the Dow Jones clawed back some its 800 point decline but nonetheless closed at minus 500 points on Monday night. Prospects of these losses being recouped are also slim, with futures suggesting a flat open for the US index.
Also, having been more subdued in their losses on Monday, Asian markets remained in the red on Tuesday, with the SSE Composite falling 1.29%, to 3,274 points, and the Hang Seng dropping 0.98%, to 23,716. Meanwhile, Japan’s TOPIX posted another morning of gains, up 0.49% to 1,646 points.
