FTSE hits post-pandemic high despite expected one-month delay to lockdown easing

  • Oops!
    Something went wrong.
    Please try again later.
·Contributor
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
UK prime minister Boris Johnson is due to confirm the delay later on Monday at a news conference, meaning a continued capacity limit for sports, pubs and cinemas, and that nightclubs would stay closed. Photo: Ben Stansall/AFP via Getty Images
UK prime minister Boris Johnson is due to confirm the delay later on Monday at a news conference, meaning a continued capacity limit for sports, pubs and cinemas, and that nightclubs would stay closed. Photo: Ben Stansall/AFP via Getty Images

London’s benchmark index touched a post-pandemic high on Monday despite reports that prime minister Boris Johnson will delay the planned unlocking of the UK economy on 21 June for another four weeks.

The FTSE 100 (^FTSE) was up more than 0.7% after the opening bell, before retreating back to close 0.2% higher, while the French CAC (^FCHI) ended 0.3% up, and the DAX (^GDAXI) was flat in Germany, after hitting a new all-time high during the session.

The FTSE 250 (^FTMC), seen as a more accurate barometer for the British economy, was flat on the day, and has been the main beneficiary of the recovery to date, having risen around 11% in the year to date.

“Many other major stock markets in the world have already recovered all of their COVID crash losses and since rallied to considerably greater heights, including the S&P in the US and the Nikkei 225 in Japan," Russ Mould, investment director at AJ Bell, said.

“Driving the UK market on Monday were oil stocks, consumer goods firms, overseas-focused banks and pharmaceutical companies, with Unilever the largest driver for the index in points terms. These movements would suggest that investors are focusing on companies that do business beyond the UK, taking a positive view on the global economy."

Read more: Oil stocks rally as Brent crude surges to two-year high

According to UK government sources, senior ministers have signed off on the decision to delay the lifting of all restrictions due to rising cases of the Delta variant, which was first identified in India.

Johnson is due to confirm the delay later on Monday at a news conference, meaning a continued capacity limit for sports, pubs and cinemas, and that nightclubs would stay closed.

According to the Night Time Industries Association (NTIA) one in four businesses will not survive longer than one month without further government support and 50% no longer than two months.

“Night time economy businesses have waited patiently for their opportunity to open for over 15 months, many have not survived, some are on a financial cliff edge, hundreds of thousands of jobs have been lost, a huge pool of talent has been swept away and others have been left to suffer extreme financial hardship,” Michael Kill, NTIA chief executive said.

“Any delay will drive confidence in the sector to a new low, culminating in workforce leaving the sector, and customers who are starved of social engagement, attending illegal unregulated events in place of businesses that are well operated, licensed and regulated.”

Read more: Nine in 10 nightlife firms fear UK roadmap delay threatens survival

Across the pond, the S&P 500 (^GSPC) lost 0.2% at the time of the European close, after the index ended at record highs on Friday, and the tech-heavy Nasdaq (^IXIC) rose 0.3%. The Dow Jones (^DJI) slumped 0.6%.

US bond yields flirted with three-month lows as investors expect the Federal Reserve to stick to its dovish monetary policy later this week.

Richard Hunter, head of markets at Interactive Investor said: “The Fed is largely expected to maintain its current level of monetary assistance and is again expected to reiterate its view that the current inflationary spike is a passing phase. Even so, there have more recently been suggestions that discussions on tapering relief are likely to be nearing the top of the agenda, even if this does not lead to imminent action.”

Elsewhere, Japan's Nikkei (^N225) rose 0.7% while MSCI's broadest index of Asia-Pacific shares outside Japan was down slightly.

Activity was limited with the region's largest markets, China, Hong Kong and Australia, being closed for a holiday.

Watch: Boris Johnson faces Tory backlash as lockdown lifting put on hold

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting