The FTSE 100 dropped as worries about rising coronavirus cases and longer-than-expected lockdowns knocked the index after positive vaccine news drove it higher yesterday.

London’s main stock index fell 0.9 per cent to 6,327 points as midday approached. The FTSE 250 of slightly smaller firms fell 0.6 per cent.

Read more: Pfizer-Biontech coronavirus vaccine now 95 per cent effective

Upbeat results from Moderna and Pfizer’s vaccine trials has sent the FTSE soaring so far this month. Yesterday, Pfizer and Biontech released new results suggesting their vaccine is 95 per cent effective, cheering markets.

But investors are increasingly aware that the shots may not be available early enough to spare economies more pain this winter.

European stocks also dipped this morning, with Germany’s Dax fell 0.9 per cent and France’s CAC 40 moved 0.8 per cent lower. The continent-wide Stoxx 600 was also down 0.7 per cent.

US stocks were set to open slightly lower after Asian stocks had a mixed session overnight.

“There are definitely some fears that the lack of progress on a new stimulus aid package in the US is going to put pressure on corporates and earnings before the vaccines do their stuff,” said Neil Wilson, chief market analyst at Markets.com

“Meanwhile the virus is showing no signs of slowing down in its spread – New York now closing schools.”

Financials and industrials weigh on FTSE 100

The dollar rose 0.2 per cent against a basket of other currencies. That suggested investors are looking for safe assets. US government bond prices also rose.

Charalambos Pissouros, senior market analyst at JFD Group, said: “The Covid era is not behind us yet.

“We may experience several more months of rising infections and economic slowdown. However, the upbeat developments with regards to the vaccine suggest that the end of this crisis is approaching.”

Read more: Pfizer chief insists company did not delay vaccine results until after US election

On the FTSE 100, stocks exposed to the economic cycle dipped. Financial groups, energy firms and travel companies were the biggest fallers.

Chris Beauchamp, chief market analyst at IG, said: “Virus fears have hit an overextended global stock market this morning, knocking European equities sharply lower and pointing towards a weaker start in the US.”

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