Home Business News Second wave fears pull FTSE below 6,000

Second wave fears pull FTSE below 6,000

by LLB Editor
15th Jun 20 12:03 pm

Markets around the world have sold off again on heightened fears around a second wave of coronavirus infections and deaths,” says Russ Mould, investment director at AJ Bell.

“Figures from Beijing show a new outbreak of locally transmitted coronavirus cases, linked to poor hygiene standards in a wholesale food market.

“While the area around the market was quickly placed under lockdown, the sharp decline in equities on Monday would suggest that investors are fearful of similar outbreaks around the world as countries start to ease lockdown restrictions.

“The FTSE 100 fell below the 6,000 mark, putting it back at levels last seen in May. Its 2% decline to 5,981 was led by a sell-off in oil producers, miners, consumer goods companies and banks.

“Only two FTSE 100 stocks went up in value, being baby food-to-cleaning products group Reckitt Benckiser and distribution group Bunzl, the latter following a better than expected trading update.

“In Asia, Hong Kong’s Hang Seng index fell 2.3% with consumer cyclicals, industries and energy stocks the worst hit. Futures prices imply the US markets will also have a bad day with pre-market indicative prices pointing to a 3.4% decline in the Dow Jones and a 3% drop in the S&P 500. At this rate, the recovery is starting to look more W than V shaped.

“More shops in England are today reopening and so trading patterns will be closely analysed as a first indicator of whether retailers can operate safely and a measure of whether consumers feel confident enough to return to the high street.

“EasyJet has resumed its first UK flights since March and so there will be a lot of attention paid to safety measures on board planes which will also affect consumer sentiment towards flying in the future.”

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