UK markets slowly rebounding from Coronavirus fears
OVER THE last week, UK markets have been slowly rebounding from fears of the economic damage caused by the Coronavirus, as the rate of infections and death numbers have been steadily decreasing daily, according to stockbroker Redmayne Bentley.
James Rowbury, inset, the firm’s investment research coordinator, said the FTSE 100 started the week in the red, as concerns grew over the spreading of the virus, however, the index then bounced back, rising 0.82 per cent for the week to Wednesday.
By Wednesday, there had been over 45,000 reported infections and 1,116 deaths, however, the second half of the week saw the rate of increase in numbers decline.
The Office for National Statistics released data on Tuesday which showed that UK Gross Domestic Product had not grown in the last quarter of 2019. The data revealed that the 0.3 per cent growth in December was largely offset by Brexit uncertainty and US-China trade wars in the previous two months, which hit the manufacturing sector particularly hard with production falling 1.1 per cent, compared to the previous quarter. However, investor sentiment was still buoyed by the data, noting it was still in line with expectations and signalled a solid start for the year. Similarly, the pound advanced 0.62 per cent against the US Dollar since the start of the week, as currency markets also adjusted to the news flow. Meanwhile, Boris Johnson has now approved the controversial High Speed 2 (HS2) UK rail project, which now may cost up to £106bn to implement.
Critics argue that the increased cost outweighs the benefits and that focusing on smaller improvements in northern towns and cities would yield larger economic benefits.
Concerns have also been raised about the impact development would have with over 100 woodlands potentially being destroyed for construction.
The announcement removed uncertainty regarding projects for Kier Group, Costain and Balfour Beatty, which consequently saw their share prices rise by 10.5 per cent, 8.45 per cent and 1.61 per cent respectively.