Markets volatile as countries take different tacks on Covid
MARKETS were volatile last week as some countries announced shop and business closures due to fears of a second wave of Covid-19 cases, while others ease lockdown measures to speed up their economic recovery, according to a leading analyst.
James Rowbury, an investment research co-ordinator at Leeds-based Redmayne Bentley, said sentiment in the markets was generally boosted by the announcement of encouraging results from coronavirus vaccine patient trials as the FTSE 100 rose 2.33 per cent over the week.
New figures suggest that between March and June, the number of workers on UK company payrolls fell by 649,000 as the number of people claiming work-related benefits reached 2.6 million.
Mr Rowbury added that, although there were no official changes to the overall unemployment rates, there are now over 47,000 more young people unemployed compared with last year, highlighting the disproportional effect of the coronavirus pandemic on that generation.
Last Tuesday, the Government instructed telecoms firms to remove all of Huawei’s 5G equipment out of their networks by 2027 and banned mobile providers from buying new Huawei 5G products after December 31, 2020. “The move followed sanctions imposed by Washington, which claimed the firm posed a national security threat to the UK. The cost of the move, added to earlier restrictions, will add up to £2bn and will delay the deployment of 5G in the UK by up to three years,” Mr Rowbury said.
He added that early last week, most US stocks closed lower after technology stocks fell and following major surges in coronavirus cases in California.
“Yet, by midday that day both US and UK stocks were higher as investors seemed more positive following recent updates from the biotech firm Moderna, which is leading the fight against Covid-19,” Mr Rowbury said.
“Moderna reported that after achieving encouraging results from testing, the final stages of human trials for a vaccine will begin this month. The leader of the US Covid-19 Task Force, Anthony Fauci, stated results were ‘encouraging’, driving Moderna’s shares up 16 per cent.”
Meanwhile, Goole chemical manufacturer Croda International has announced that it has reached an agreement to buy Avanti for up to $260m.
The news was met positively, as the firm’s share price gained 4.13 per cent.