FTSE 100 off to strong start to 2021 but Wall Street slips from record highs
The FTSE 100 got the year off to a strong start today, bursting through the 6,600 point mark this morning, before closing the day up 1.8 per cent.
However, Wall Street slipped back from record highs as the world’s markets got 2021 off to a fast start.
In the first session of the new year – and the first of the post-Brexit era – London’s premier index picked up 2.8 per cent to trade at 6,639.47 by midday.
The morning’s trading marked a strong start to the new year after last year’s coronavirus-induced tumble, and came despite fears of a new lockdown in the UK.
However, the FTSE was dragged down in the late afternoon after the Dow, the Nasdaq and the S&P 500 all fell back after last year’s rally.
As markets closed, the index stood at 6577.83.
Miners drive FTSE charge
The blue-chip bourse shed 15 per cent in total last year, but surged back in November and December on the news of a number of working coronavirus vaccines.
In addition, the striking of a free trade Brexit deal – just days before the end of the transition period – helped push sentiment even higher in the final days of the year.
Shares in Entain led the way, rising 26 per cent after the Ladbrokes owner received an $11bn offer from MGM.
Mining giants Fresnillo, Glencore, Anglo American and BHP all also rose between five and nine per cent.
Fallers were few and far between, but leading bank stocks such as Natwest, Barclays, Standard Chartered and Lloyds all fell.
The FTSE’s rise outperformed its rivals across the continent, with the pan-European Stoxx 600 up 1.3 per cent.
Germany’s DAX gained 1.1 per cent to trade below all-time highs, while France’s CAC 40 was up 1.6 per cent.
The FTSE 250 of midcap firms also picked up 1.1 per cent as markets opened this morning.
Holiday giant Tui led the way after its chief executive claimed that the coming summer would see normality restored.
The gains came despite an additional 55,000 cases of coronavirus being reported yesterday in the UK, as the recent surge in infections continues apace.
Boris Johnson yesterday said that restrictions were “likely” to get tougher as a result of the surge, which has been attributed to a new variant of the disease.
In a bid to tackle the worsening situation, the rollout of the Astrazeneca/Oxford University vaccine began today, with 500,000 doses immediately available.
Spreadex analyst Connor Campbell said that the vaccine was “another step on the journey back to normality, and investors have seized upon it with all their might”.
Wall Street slips after record open
After hitting record highs at the opening bell, the S&P 500 and Dow Jones both fell sharply on the first day of trading of 2021.
The S&P is currently down 1.5 per cent at 3,701 points, while the Dow dropped 1.6 per cent to 30,104 points.
However, the Nasdaq also dipped into the red, shedding 1.3 per cent to trade at 12,720 points.
The falls come after a year in which the three markets batted off the impact of the coronavirus pandemic to increase 7.2 per cent, 16.2 per cent and 43.6 per cent.
All eyes will be on tomorrow’s run-off race for Georgia’s two Senate seats. If the Democrats win both, the Senate will be split evenly between the two parties, meaning new vice president Kamala Harris will have the deciding vote.
Such an outcome would hand control of the legislature to incoming President Joe Biden, raising hopes of further economic stimulus in 2021 as the US tries to bounce back from the crisis.