Resurgence of COVID hits FTSE

Although today should have marked a positive turning point for the markets as non-essential shops in Britain start trading again, Belgium, France and other European countries reopen their borders and many airlines restart flights from today, COVID 19 demonstrated that the recovery is built on a very fragile foundation and that it could take very little for a fresh outbreak to paralyse businesses again.

A few new cases that cropped up in a Beijing market late last week have already spread across half of the city and some districts are already bringing in restrictions on movement of people. The news is not only hitting British stocks but is also eroding faith in other European blue chips, particularly export oriented ones. In London metal producers, oil firms, retail shops and travel businesses are among the hardest hit stocks.

BP tackles long-term oil price changes

The sharp drop in Brent crude prices over the last five months was reflected in BP’s first quarter bottom line as the company took a charge of $17.5 billion because of lower oil prices. BP changed its long-term assumption for oil prices, forecasting that the price will be closer to $55 rather than the $70 previously predicted. This is still about 30% higher than today’s oil price.

EasyJet has started its first flights to Europe today but the stock traded lower as investors worried that the resurgence in the virus will dampen tourists’ travel plans.

Bunzl defies gravity

International distribution group Bunzl was the only FTSE 100 stock to trade higher as it managed to increase revenues in the first half of the year on deliveries of food and medical products. Shares jumped over 6% after the firm said its revenues are likely to increase by 6% in the first six months of the financial year.