Avoiding the collapse that greeted previous lockdown announcements, the return to the harshest measures in the UK nevertheless clipped the FTSE’s wings on Tuesday.
At points on Monday, the UK index was up 2.9%, galloping to levels last seen at the start of March 2020 following the Oxford/AstraZeneca vaccine rollout. Then it was shot down by the announcement Boris Johnson would be addressing the nation to outline the latest set of restrictions.
It shows how keen investors were to start 2021 on the front foot that the FTSE still managed to end Monday up 1.7% despite a fresh 6-week lockdown (with the pound admittedly taking much of the flak).
There was evidence of such again this Tuesday. While the rest of Europe started essentially flat – the DAX down 0.1%, the CAC up the same amount – the FTSE rose 0.5%, desperate to keep above 6,600.
Sterling held up as well as it could, nudging 0.1% higher against the dollar but remaining unchanged against the euro. Not great, given the extent of yesterday’s fall against both rival currencies.
How the index and currency perform throughout the rest of the day may well come down to what additional support Chancellor Rishi Sunak announces this Tuesday, ideally at least a return to the kind of aid offered during Lockdown 1.0.
Over in the US the Dow Jones is heading for a 0.2% increase after the bell, as it attempts to claw back a fraction of Monday’s 380 point slump. The index has dual concerns at the start of the New Year: like in many countries, a rapid rise in covid-19 cases; and related, the runoff Senate elections in Georgia, the results of which will dictate the next few years for the Biden administration. One of those issues will be decided much sooner than the other, with Georgians heading to the polls this Tuesday.
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