A slow start to the day has marked an end to the recent bullish run for the FTSE 100 index, which had been benefiting from optimism over a US stimulus package. Elsewhere in Europe, traders looked on nervously with Germany’s Dax slipping 0.13% to 13,041 points and the French benchmark CAC 40 down 0.28% to 5,058.
This comes a day after the FTSE 100 resisted poor UK GDP data that showed Britain had fallen into its worst-ever recession in the first half of the year. Traders have also had support from optimism about a US stimulus package, a capital gains tax cut, and hopes of a coronavirus vaccine. Markets have reacted less to US-China tensions in recent sessions.
Bullish sentiment stalled this morning, with attention now turned to the US weekly jobless figures due to be published later today. A further 1.1m workers are expected to have claimed for unemployment benefits in the latest week’s data. This marks a slowing on the previous weekly figures but is significantly higher than pre-pandemic numbers.
Optimism about a US stimulus package has also been hit after Speaker Nancy Pelosi warned Democrats and the Trump administration were “miles apart” on a new fiscal policy.
This morning’s losses reversed a large portion of yesterday’s gains on the FTSE 100 as bullish sentiment began to disappear. investors aren’t feeling as confident as they previously were over the FTSE since the release of the latest GDP data.
The blue-chip index was dragged down further by ex-dividend stock, with BP, Shell, Diageo, AstraZeneca, GSK, and Legal & General among the companies to go ex-dividend. This combination of big stocks trading without the rights to their dividend and a bit of profit-taking after a strong run for equities so far in August has seen the FTSE 100’s run stall earlier today.
