Resurgence of COVID hits FTSE
Fiona Cincotta June 15, 2020 10:21 AM
The COVID-19 recovery is built on a very fragile foundation - it could take very little for a fresh outbreak to paralyse businesses again.
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.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.