Investors are finding it hard to make up their minds if they are worried about the coronavirus or not,” says Russ Mould, investment director at AJ Bell.
One day they are happy to shrug it off and bid up stocks as if there will be no impact to corporate earnings at all. The next day they are fretting over the potential of second waves happening, even though such risks have been present all along.
“Second wave incidents will be closely monitored by the markets to see how quickly new outbreaks can be contained. The focus to date has been on Beijing but cases have been recorded in provinces across China.
“Making matters worse is that various US states are still reporting record numbers of new cases, implying that the pandemic is not yet under control.
“Today is very much a risk-off day with investors selling miners and leisure stocks, with Carnival the biggest faller on the FTSE 100.
“Value stocks were off the menu with investors instead bidding up companies deemed to be quality stocks such as rat catcher Rentokil, safety services group Halma and London Stock Exchange.
“The FTSE 100 index fell 0.6% to 6,213, echoing similar declines in European and Asian markets.”