Regardless of whether or not it’s the right decision, Boris Johnson’s decision to implement the lightest fresh lockdown restrictions possible has given the FTSE a – potentially temporary – reprieve from its covid-19 concerns.
Outstripping its Eurozone and US peers, the UK index shot 1.2% higher, allowing the FTSE to tickle 5925. That the pound turned things around, flat against the dollar but up 0.3% against the euro, took the edge off of the index’s growth, but didn’t do too much damage.
This also meant the FTSE was fine with shaking off some disappointing flash PMIs. The manufacturing reading fell from 55.2 to 54.3, while the services sector suffered a sharper than forecast drop from an ‘Eat Out to Help Out’-boosted 58.8 to 55.1. That latter reading, however, puts it well above the 47.6 seen for the Eurozone as a whole.
It is worth remembering that, as Dominic Raab conceded, the measures announced in the last few days are by no means a ‘silver bullet’ when it comes to seeing off – or mitigating – a second wave, and further restrictions could still be implemented, especially with the UK’s current daily case figures.
Dampened somewhat by their own PMIs, the Eurozone’s gains were pretty meek, with the DAX up 0.4% and the CAC rising 0.6%.
The Dow Jones, meanwhile, was fairly sluggish, adding at most a few points as it lingered around the 27,300 mark.
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