FTSE 100 makes sluggish start amid further Covid angst; Burberry departure shocks market

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The FTSE 100 made a sluggish start to proceedings as the spread of the Covid delta variant placed question marks over the easing of final lockdown restrictions and raised the prospect of a renewed overseas travel embargo.

Certainly, the EU appears to be in the process of quarantining the UK, if reports in the popular press are to be believed.

The market was taking them seriously with shares in British Airways owner IAG (LON:IAG) marked down 1.6%.

Budget carriers EasyJet (LON:EZJ), Ryanair (LON:RYA) and Wizz Air (LON:WIZZ) followed IAG’s descent as they dropped 1.8%, 1.3% and 1.2% respectively.

The Footsie’s top faller early on was Burberry (LON:BRBY), which was rocked by the decision of Marco Gobbetti, its chief executive, to quit in order to find work closer to home.

The news wiped half a billion pounds from the luxury fashion chain’s market capitalisation.

6.50 am: Sluggish start predicted

The FTSE 100 looks set to open unchanged amid worries over the spread of the Covid Delta variant, which looks set to put the kibosh on travel to Europe’s sunspots.

The Daily Mail in its inimitable style says Angela Merkel has personally begun a campaign to ban British holidaymakers from the EU.

Whatever the story, it is likely the airlines and travel firms will come under pressure during the early exchanges.

Asia’s main markets began the session in a subdued fashion, while the start to trading in Hong Kong was delayed by a rainstorm.

Back here in the UK, new health secretary Sajid Javid is reported to be a new voice in favour of the end of Covid restrictions next month, arguing controls are having a punitive impact on the economy.

Predecessor Matt Hancock, who quit after an affair with an aide, had always taken a more cautious approach to the phased ending of lockdown.

Looking ahead, we have corporate updates from Primark owner AB Foods (LON:ABF), outsourcing specialist Serco (LON:SRP) and electricals giant Dixons (LON:DC.).

In macro news, American non-farm payrolls take centre stage on Friday.

“One thing that came from last week’s comments by John Williams [New York Fed president] was a concern about the labour market and the lack of a rebound in the participation rate, despite record vacancy rates,” said Michael Hewson, analyst at CMC Markets.

“If Williams is concerned about this, he is unlikely to be the only one, which makes this week’s US jobs report even more important when it comes to trying to read the reaction function of Fed officials in the coming months.”

Around the markets

  • Pound US$1.3896 (+0.12%)
  • Bitcoin US$34,455.17 (+3.81%)
  • Gold US$1,784.50 (+0.38%)       
  • Brent crude US$74.11 (flat)

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were lower on Monday as official data showed profits at China’s industrial firms rose 36.4% in May as compared with a year earlier.

That was weaker than a 57% year-on-year growth posted in April.

The Shanghai Composite in China fell 0.13% and Hong Kong’s Hang Seng index slipped 0.08%

In Japan, the Nikkei 225 dipped 0.15% while South Korea’s Kospi declined 0.12%.

Shares in Australia fell, with the S&P/ASX 200 trading 0.03% lower.

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