FTSE 100 sinks as Biden rally runs out of steam
The FTSE 100 slid today as markets around the world stepped back from new highs after a brief rally on Joe Biden’s swearing in as the 46th President of the United States.
After a late surge saw it pick up 0.4 per cent yesterday, London’s leading index gained 0.2 per cent this morning to hit 6,770 points.
However, as has proved the case throughout the week, it was unable to sustain its momentum in the afternoon, and closed down 0.3 per cent at 6,718.
The smaller FTSE 250 index of mid-cap firms also dropped, falling 0.4 per cent to 20,795 points.
A similar lethargy came across its continental rivals, with the DAX and the CAC both in the red as trading finished.
An uninspiring policy update from the European Central Bank seemed to dampen traders spirits after some initial excitement over Biden’s swearing-in.
On the FTSE 100, Just Eat was the biggest riser, up 5.0 per cent, followed by software company Sage Group, which rose 3.5 per cent after it said business was brisk in the first quarter, in line with expectations.
Banking stocks HSBC and Nat West, which often act as economic bellwethers, were also on the front foot rising by around 2.5 per cent.
Wall Street stumbles after ‘Biden bump’ brings new highs
In the US, yesterday’s rally at first showed no signs of slowing down as Wall Street opened at record levels once again this afternoon.
Biden’s inauguration, which passed peacefully, triggered a global market rally which saw several indices hit new record highs.
But although the Nasdaq continued to rally after yesterday’s 1.3 per cent gain, the S&P 500 and Dow Jones soon faltered.
The indices fell 0.02 and 0.1 per cent respectively.
The falls came after another worrying set of jobs data from the Labor Department, which showed that another 900,000 people had applied for benefits last week.
Fears over subdued employment are for the moment being held in check by the expectation of a hefty new package of economic support from the incoming administration.
Biden has already pledged a $1.9bn stimulus package in a bid to revive the struggling US economy, and new treasury secretary Janet Yellen has said the administration will “act big” in its fight against the coronavirus pandemic.
Wall Street’s strong open came after Asian markets climbed overnight, with the MSCI index of pan-Asian shares up 0.9 per cent overall.
The Nikkei jumped 0.8 per cent, while China’s blue-chip market gained 1.8 per cent.