Thursday 12 November 2020 2:52 pm

FTSE 100 and US stocks tumble as Covid-19 vaccine rally runs out of steam

Global markets largely slipped lower today as the three-day equity rally sparked by news of a breakthrough in the hunt for a Covid-19 vaccine began to lose momentum, with the FTSE 100 and US stocks both falling.

London’s blue-chip index ended an eight-day winning streak, falling 1.19 per cent to 6,305.85 by 2.45pm. The midcap FTSE 250 shed 0.48 per cent.

Read more: UK GDP misses expectations despite record 15.5 per cent rebound in third quarter

Surging Covid-19 cases give investors pause

On Wall Street, the S&P 500 and the Dow fell after the open as coronavirus cases in the US continued to surge and investors weighed the timeline for the mass roll-out of an effective vaccine.

The S&P 500 slipped 0.44 per cent in early trading in New York, while the Dow fell 0.72 per cent. 

The tech-heavy Nasdaq added 0.32 per cent, with the index boosted by a second session of gains for many major technology stocks. 

“With several of the early November catalysts out of the way, the market does appear to be expressing concern with some of the near-term COVID trends,” said Yousef Abbasi, global market strategist at Stonex Group.

GDP miss sends FTSE 100 lower despite record rebound

Disappointing economic figures also hit the FTSE 100 after the UK GDP’s record third-quarter rebound fell short of expectations as the economy struggled to maintain its recovery from the pandemic hit.

Before the Open newsletter: Start your day with the City View podcast and key market data

The UK economy grew by 15.5 per cent between June and September, ONS data showed. Economists had predicted a 15.8 per cent quarterly expansion. 

“A swollen summer of economic activity hasn’t repaired the damage done in the first half of year though,” said Laith Khalaf, financial analyst at AJ Bell.

“The new lockdown means the UK can expect to end 2020 significantly behind where it started.”

In company news, Burberry rose 3.66 per cent after the luxury fashion group clung to profitability during the first half, despite the pandemic dealing a substantial blow to its revenues. 

Insurer Legal & General slipped 3.3 per cent after announcing plans to keep its dividend flat in 2020, and outlining a five-year plan to investors.

The FTSE 100’s European peers also slipped as the vaccine rally lost momentum and surging coronavirus infections raised doubts about a quicker economic recovery from the pandemic. 

The pan-continental Stoxx 600 dropped 0.86 per cent in morning trading .In Germany, the Dax fell 1.3 per cent, while France’s CAC 40 slipped 1.62 per cent. 

Read more: Burberry shares climb as group clings onto profit during pandemic

Overnight, Asian markets posted a mixed performance. MSCI’s broadest index of Asian stocks excluding Japan closed broadly flat.

In Hong Kong, the Hang Seng fell 0.45 per cent, while the Shanghai Composite dropped 0.11 per cent. Japan’s Nikkei rose 0.68 per cent.

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