FTSE 100 Trades Moderately, Surging COVID-19 Cases Sparked Fears
According to a COVID-19 social study released on Friday by University College London, the UK’s wealth inequality increases because of the Coronavirus epidemic. Launched a week before the first lockdown began, it is the UK’s largest study with over 70,000 participants. Respondents were followed over the past 34 weeks and focused on their overall health, mental health, and response to tightening restrictions and government advice.
Nearly half of the people who received “very difficult” financial help are now calling things “very bad,” according to the study, with 23% further stating that things are “worse.” This figure had increased importantly since July when 57% of the same group reported being financially worse before the COVID-19.
Another reason for the continued market rally is the catalyst money from the Bank of England and other central banks that are pumping into the economies. We are looking at a range of measures and continue to have low-interest rates. Such low rates encourage people to invest instead of sitting on their cash due to a lack of fortuity costs. A high degree of quantitative easing also means that governmental investors have ample of funds that need to be hired. The logical place for this is in the stock market.
How Brexit & Covid-19 Affect the UK Market
On Thursday, US shares fell sharply as the number of COVID-19 cases increased globally and reported that European leaders are taking no-deal Brexit plans. The Times reported that EU leaders worried that economic disordering would take place without EU eventuality without measures to shock businesses and fishing communities without a deal.
Both sides “have nowhere” to agree on fishing rights as hardline member states, led by France’s Emanuel Macron, are challenging the same level of accessibility to water after Brexit. After leaping over 13% over the past two weeks on confidence over vaccines, the FTSE 100 index withdraw this week over concerns that are stimulating COVID-19 cases and deadlock on the Brexit deal, a budding economic recovery can derail.
Azad Zangana, a senior European economist and strategist at Scodders, said, “The reality has hit home for investors that we are seeing more and more disordering, especially in areas of Europe, which was expected that we would be in winter. Chief Brexit arbitrators held off direct talks on Thursday after an EU team member tested positive for COVID-19, with one EU minister saying the talks were at a “critical stage” but can still be successful.
The stock market rally may have come as a surprise to some, given the recently imposed UK economic outlook. From here on, we should think there are many reasons why the FTSE 100 could rally. One such is COVID-19 vaccine hopes. The major index might see a 10% hike by the end of the year. It becomes an inalienable prognostication; if there are more rallies in the stock market, more money is invested. Rightly or wrongly, this can lead to a long-term rally.