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FTSE 100 gets back on its feet after big fall

by LLB Editor
21st Apr 21 9:31 am

After suffering its most substantial fall in two months, investors will be relieved to see the FTSE 100 dust itself off and get fight back on Wednesday as it looks to regain some of the big losses,” says AJ Bell investment director Russ Mould.

“The move higher comes despite one of the market’s big fears – inflation – ticking up in the UK. It probably helps that the CPI measure came in short of expectations and it is also worth remembering that a modest climb in prices is a sign of the economy getting back on its feet.

“The likely trajectory of inflation in the longer term means this issue is not going to go away and will remain something investors need to consider even if a short-term spike linked to pent-up demand in lockdown diminishes.

“For now the threat of rate rises to combat inflation looks very remote and the falls in Asia and the US overnight are a reminder that a more pressing issue, Covid-19, hasn’t gone away.

“The world still faces a big challenge in containing the virus and it is no surprise to see travel stocks under some of the most severe pressure given the disparity in different countries’ experiences with Covid.

“In London shares linked to the reopening, including airlines and other travel-related businesses, managed a bit of a rebound but we will almost certainly see more swings in sentiment as we move from spring into summer.”

 

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