The FTSE was without inhibition on Monday, a strong open turning into a super-charged performance as the session went on. However, an announcement this evening may serve to undermine the index’s growth come Tuesday morning.
Climbing 2.5%, the UK index found its way back to 6,625 – not the record highs recently managed by the DAX and Dow Jones, but, if it can close at that level, still its best price in 10 months.
What is interesting is that the FTSE suffered only the mildest hesitation after it was announced that Boris Johnson would be addressing the nation at 8pm this evening to outline tougher lockdown measures. At the very least it will be a return to the rules seen last November; at its worst, back to the harshest limitations put in place during the inaugural lockdown in March.
For now it appears that the optimism surrounding the rollout of the Oxford/AstraZeneca vaccine is currently exerting a stronger pull on investors than fears over the economic impact of lockdown 3.0.
That and the fact the poor pound was the one bearing the brunt if the negative reaction to the news, ensuring the FTSE could continue to gallivant about.
After a flat start, cable sank 0.7%, unwinding a good chunk of its December 2020 growth, falling back to $1.3575. Against the euro it was even worse off, sinking 1.2% as it tripled the losses suffered at the start of the day. That effectively wipes out the surge sterling saw on the final day of last year.
Whether the FTSE can remain so blasé tomorrow will be dictated by the exact scope and severity of what the Prime Minister reveals tonight.
Elsewhere the DAX held above 13,800 as it rose 1.2%, able to broadly ignore the euro’s gains against dollar and pound alike, while the CAC was less enthusiastic but still above 6,600 following a 0.6% increase.
Bucking Europe’s vaccine-led optimism, the Dow Jones dropped half a percent, retreating from what would have been a fresh all-time peak. It is understandably nervy – tomorrow sees the runoff Senate races in Georgia, a pair of votes just as important as the nationwide election due to the impact the results will have on who runs Congress’s upper chamber.
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