FTSE 100 slides as new coronavirus cases spook investors
The FTSE 100 fell in morning trading as investor excitement following yesterday’s strong US payrolls data petered out and fears over surging coronavirus cases helped dampen sentiment.
The blue-chip index was 0.8 per cent lower approaching midday, at 6,190 points. On its current path, the FTSE 100 will have risen marginally this week.
Read more: Asian stocks climb to four-month high on US jobs data
The FTSE 250 index of mid-sized fell, dropping 0.1 per cent. In Europe, Germany’s Dax was 0.2 per cent lower and the continent-wide Stoxx 600 was down 0.5 per cent.
Global stocks climbed higher yesterday after data showed the US economy added jobs at a record pace in June. Investors cheered the latest sign of a rebound in business activity following the easing of coronavirus lockdowns.
The US’s tech-heavy Nasdaq index closed at a record high yesterday. It continued the trend of stock markets soaring while economies around the world remain severely depressed.
However, fears over spiking Covid-19 cases in several US states and the possibility of further lockdowns helped keep a lid on sentiment today. Texas and Florida are among the states to have rowed back on plans to reopen as cases soar.
It has been a volatile few weeks for traders as they have contended with conflicting data. Stock markets have regularly risen or fallen by more than one per cent each day.
China services pick up sharply
Investors were cheery in Asia today, however. Asian markets hit a four-month high in the wake of further positive economic data from China and the US payrolls figures.
China’s services sector expanded at its quickest pace in over a decade in June, the Caixin/Markit services Purchasing Managers’ Index (PMI) showed, as the easing of lockdown measures revived consumer demand.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose to its highest level since late February. Hong Kong’s Hang Seng climbed one per cent and the Shanghai Composite added two per cent respectively.
David Madden, market analyst at trading platform CMC Markets, said part of the reason European markets were subdued is that the US is on holiday for Independence Day.
“Traders on this side of the Atlantic might be tempted to sit on their hands today while their US counterparts enjoy their long weekend,” he said.
“The infection rate in the US and the pausing of the reopening of states is still a factor for traders to consider.”
Read more: US economy adds 4.8m jobs as recovery continues
In the currency markets, the euro slipped slightly after French prime minister Eduard Philipe resigned from President Emmanuel Macron’s government. It was broadly flat against the dollar heading towards midday at €1.123.
The pound was also roughly flat against the dollar, trading at £1.246.