FTSE 100 looks set to start the trading week in the doldrums with worries over a coronavirus second wave, trade war and recent lacklustre economic data, counterbalanced by China’s move to pump US$101bn into the financial system.
The decision gave stocks on the Shenzhen and in Shanghai and Hong Kong a big boost and lifted the predominantly glum mood across Asia on Monday – but only a little.
“There appears to be an increasing nervousness, despite the gains of the last 100 days, that for all of the optimism over recent economic re-openings, that economies are reaching the limits of what they can do, without increasing the risk of a surging second wave of cases, as we head towards the autumn months,” said Michael Hewson of CMC Markets.
Certainly, last week’s batch of data did little to shore up confidence. China and America’s retail sales figures made grim reading as did the slump in the UK’s GDP.
“Rising tensions between the China and the US, after the cancellation of US/China trade talks, and the signing of an executive order by President Trump forcing China’s ByteDance to sell off its US operation within 90 days isn’t helping the overall mood either,” added Hewson.
Here at home, the Financial Times is reporting that the bailout loans scheme could be extended to the private equity sector in a bid to shore up businesses and retain jobs.
Around the market
- Pound worth US$1.3090 (flat)
- Gold US$1,954.40, up US$4.60 an ounce
- Brent crude US$45.20, up 40 cents a barrel