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Saturday, July 2, 2022
Stocks & Shares

FTSE 100 expected to fall on vaccination concerns


The index will join Asian stock markets in the red, with the Hang Seng and the Shanghai Composite both down more than 1.4%, and the Nikkei down 0.6%

The FTSE 100 is expected to drop on Tuesday amid ongoing worries about a slowing in the European vaccine program one year on from the first UK coronavirus lockdown.

Ahead of unemployment data later, London’s blue chip stocks have been called 42 points lower by spread-betters on the IG platform, following the 17-point advance to 6,726.1 at the start of the week.

The index will join Asian stock markets in the red, with the Hang Seng and the Shanghai Composite both down more than 1.4%, and the Nikkei down 0.6%.

Overnight, the major US stock benchmarks ended higher, led by the big tech stocks of the Nasdaq, where the composite index added 1.2%, ahead of the S&P 500 at 0.7% and the Dow Jones at 0.3%.

For all the optimism over the vaccine program, it is only as strong as its weakest link, and that link is currently in Europe, with Germany this morning imposing a five-day lockdown over the Easter period in an attempt to stem the pace of transmission, said market analyst Michael Hewson at CMC Markets.

This presents a problem for the travel sector and the potential for a speedy recovery, given the slow nature of the rollout due to supply, as well as hesitancy concerns, he said.

When set against rising infection rates across Europe, it is likely to mean that even in the event of a successful rollout in the UK, it’s highly unlikely that international travel will be able to return in any meaningful way while a large part of Europe remains behind the curve in inoculating its populations, Hewson said.

The latest UK unemployment numbers for January and February are again likely to paint a distorted picture of the UK labour market as the furlough scheme remains in place, a year on from the first lockdown.

The ILO measure for the three months to January is expected to increase to 5.2% from 5.1%, while February’s jobless claims numbers will be in focus after dropping to 7.2% in January from 7.4% in December.


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