FTSE dips then heads higher

A record increase in the number of cases in the US is spooking the markets and causing a dip in the FTSE

Charts (4)

A record increase in the number of cases in the US is spooking the markets and causing a dip in the FTSE. However, after the initial decline London stocks are beginning to claw their way higher, particularly defensive assets like utilities and manufacturing firms. Trading and investment firms are also making leaps this morning.

One positive among the gloomy global corona news is that the World Health Organization has declared the spread in Western Europe under control, despite a few localized outbreaks in Germany. There is a fresh increase in the number of cases in Eastern Europe as these countries opened their international borders earlier than Germany and France, but the increase here is from a fairly low base, where the number of cases was  just a fraction of those in the UK, Italy and France.

The unusually hot British summer has not been good news for all and has caused water utilities concerns over the declining level of water in reservoirs. United Utilities, which has started issuing warnings to customers about water usage, lost more than 4% in early trade.

EasyJet, recently relegated out of the FTSE 100, has lost over 5% in early trade, being still sold off a day after reporting a significant loss in the first half of the year. Although the company managed to shore up its finances with a $520 million share placing, this wasn’t enough to lift the shares out of a slump.

US petroleum stocks driving oil price

Oil prices are still sliding, continuing the trend of the last two days because key US petroleum stocks have risen rather than fallen this week. US jobless data due out later today will also be a proxy indicator for what to expect in terms of demand in the US.

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