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Markets look past new coronavirus flare-ups

by LLB Editor
29th Jun 20 10:14 am

Investors’ fears over a second wave of Covid-19 have proved correct after China reinstated a lockdown for 400,000 people after a spike in the virus.

The US also continues to struggle to contain infections, seeing a sharp uptick in the daily number of cases in Texas. In the UK, there is chatter that Leicester could face a localised lockdown after a rise in coronavirus cases,” says Russ Mould, investment director at AJ Bell.

“All these events have reminded the world that the pandemic is still raging and the road back to normality is going to be a long and treacherous one. However, these fears have been clouding the market for some time and the market is forward-looking, hence why investors seem to have shrugged off the latest events which were fully expected.

“Investors now seem to be taking the view that localised flare-ups are going to happen and that they will be quickly contained. As such, markets take a step forward on Monday with the FTSE 100 up 0.1% to 6,166 and Germany’s DAX index up 0.4%. In Asia, Hong Kong’s Hang Seng index narrowed earlier losses, but Japan’s Nikkei 225 slipped 2.3% with tech stocks firmly out of favour.

“On the UK market, ITV jumped 2.2% after saying it would start filming entertainment shows again, starting with popular game show Catchphase.

The news was taken as a positive signal that the media group is continuing its recovery, following recent signs that companies were beginning to make new adverts again. Advertising is one of ITV’s key sources of revenue.”

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