Fragile hope that the coronavirus may have done its worst in Europe is helping lift London stocks and is boosting the performance of other European indices. For a few days running the number of new cases in the worst hit countries Italy, Spain and Germany seems to have plateaued out, helping investors see an eventual end date for the lockdowns across the continent.
Rising up the FTSE ranks are companies that have been worst hit by the pandemic; airlines, cruise operators, hotels and related service providers. Investors are also looking at consumer-facing firms like home builders and clothes and sports retailers, their assessment being that these stocks may have fallen as low as they would in this crisis and that it is time for some bargain hunting. A word of caution though; throughout the spread of the corona across Europe, the UK has trailed a week to ten days behind Italy and Spain, and the health situation at home may yet become worse before it genuinely improves.
Pound recovers from PM shock
Boris Johnson’s deteriorating health condition which saw him moved into an intensive care unit last night caused a ripple of shock for the pound which dropped against the dollar and the yen. The big question was who will lead the UK while the PM is hospitalised but as Foreign Affairs Secretary Dominic Raab stepped into this position, he gave the impression that throughout Johnson’s absence it will be more or less business as usual.
This morning’s rally in stocks changed the mood in the currency markets and sterling is now trading up nearly 0.9% against the dollar.