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FTSE 100 rebounds as UK public finances improve

by LLB Reporter
21st Dec 21 10:35 am

As we head towards an uncertain festive break the market is swaying about more than someone who’s over-indulged on the sherries on Christmas Day.

That’s unsurprising as investors still awaiting a full picture on just how disruptive Omicron is going to be – with UK Prime Minister Boris Johnson putting off any decision on further restrictions for now.

There’s certainly already been signs of a sizeable hit to retail, hospitality and travel businesses as people enter self-imposed lockdowns to avoid having to isolate over Christmas.

“The slight improvement in the public finances revealed today may give the Chancellor Rishi Sunak scope to be more Santa than Scrooge in providing support to these industries during this challenging period,” said AJ Bell investment director Russ Mould.

“Added to the mix is Democratic Senator Joe Manchin’s decision not to support President Biden’s Build Back Better infrastructure bill, throwing a spanner in the works of a key plank of the administration’s policy programme and hitting the share prices of industrial businesses, both here and in the US, which would have expected to benefit from the $1.9 trillion of spending.

“Time will tell if this is a negotiating strategy from Manchin or if he really intends to blow up the legislation entirely.

“There was a broad-based recovery for the FTSE 100 on Tuesday morning with just three stocks, Unilever, Sainsbury’s and HSBC, trading in negative territory.

“JD Sports Fashion got a lift off the back of strong results from Nike overnight. The US sportswear giant beat sales and, perhaps more significantly, earnings forecasts. It looks like Nike is starting to put the supply chain issues which have dogged it in recent months behind it.

“Just ahead of the results Nike made its bid to dominate the metaverse just as its trainers and clobber do in real life by buying virtual sneaker firm RTFKT. In addition the digital and direct-to-consumer channels continue to be priorities for future, more profitable growth.”

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