FTSE 100 falls as recovery concerns weigh on markets
The FTSE 100 is fell today as last week’s slide in investor confidence continued.
London’s premier index closed 0.2 per cent down to stand at 6,723 points. The FTE 250 of midcaps went the other way, rising 0.1 per cent to 20,646 points.
In a sluggish day of trading, markets never really got going, with Wall Street closed due to Martin Luther King day.
The fall came after a downbeat previous week on the market, which saw the FTSE shed 2.0 per cent.
That took the sheen of a record open to the year which saw the bourse gain 6.4 per cent in the first week of trading.
Despite the sloth, Spreadex analyst Connor Campbell said this week could yet be one to remember for traders.
The combination of Joe Biden’s inauguration in the US, the first meeting of the European Central Bank this year, and comments from Bank of England Governor Andrew Bailey could prompt shifts in the market, he said.
Oil firms and airlines were among the biggest fallers, with BP and Shell both down nearly over 1.0 per cent on a slide in oil prices.
BA owner IAG also dropped 1.9 per cent as the government decided to shut all of its travel corridors in a bid to keep out infectious people. On the FTSE 250, Easyjet fell 2.5 per cent.
As a result of the new restrictions, HSBC reduced its forecasts for airline capacity in the first quarter from 20 per cent to 10 per cent.
CMC Markets’ Michael Hewson said that fears of a delayed economic recovery were squeezing sentiment.
“[These} concerns were given added credence on weaker than expected US retail sales data as well as European governments variously announcing tighter lockdown restrictions, in the face of rising coronavirus infection and death rates”, he added.
A lower than hoped for new economic stimulus package from the incoming Biden administration had also knocked optimism, Hewson said.
The FTSE is currently trading behind of its biggest European markets, with the German DAX up 0.3 per cent and France’s CAC up 0.2 per cent.
The malaise continued around the world, with Japan’s Nikkei sliding nearly one per cent from 30-year highs overnight.