The FTSE 100 dropped again today after Chancellor Rishi Sunak warned that the economy would get worse before it got better.
Across the Atlantic, Wall Street’s main markets crept upwards as traders looked for details of a new stimulus package for the distressed economy.
London’s premier index was up 0.1 per cent at the opening bell, but fell back 0.6 per cent by the early afternoon to stand at 6,757 points.
The fall came after the bourse lost 1.0 per cent yesterday as last week’s fast start to 2021 cooled around the world.
The second successive slide is now eating into last week’s gains, which saw the FTSE 100 pick up 6.4 per cent.
Miner Fresnillo was the biggest faller, down 4.8 per cent. A host of other firms also fell by over two per cent.
DIY firm Kingfisher, which owns B&Q and Screwfix, was the biggest riser in the morning’s trading, rising 2.7 per cent.
The FTSE 250 of mid-cap firms also fell 0.3 per cent to 20,707 points.
Richard Hunter, head of markets at Interactive Investor, said: “In the UK, the arguably important psychological level of 7000 for the FTSE 100 remains out of reach for now, as the index has faltered slightly after a sparkling start to the year.
“Even so, the index is still ahead by 5.0 per cent overall in the first few days of trading this year, although the wider concerns being felt by many economies as another lockdown bites have taken some of the shine off sentiment.”
The soft open meant that European markets are currently outperforming the FTSE.
Germany’s DAX and the French CAC are both up 0.1 per cent so far today.
US markets edge up on stimulus hopes
Overnight shares eased back from record highs around the world as traders took a breather on the back of rising coronavirus cases and political chaos in the US.
However, Wall Street opened slightly higher this afternoon as traders waited for details of a new round of financial support expected with the inauguration of President Joe Biden next week.
The Nasdaq led the modest gains, up 0.3 per cent, while the S&P 500 and Dow Jones were flat at the open.
Traders are also looking ahead to “earnings’ season”, with some of America’s biggest banks due to report results later this week.
JP Morgan, Wells Fargo, and Citigroup will all share fourth quarter updates with the market, in what could be a key indication of the strength of the world’s largest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent after touching an all-time high on Monday.