Down in six of the past seven sessions, the top UK index is now where it was at the start of 2021.
The last few turbulent trading sessions have all but wiped out what had been a strong start to the year.
The pandemic remains a major theme, with some havoc being caused by variants of the virus, in turn leading to further lockdowns, strengthened travel restrictions. That means a delay to any economic recovery being given the chance to take hold.
While governments and central banks stand ready to provide further support, the effects of stimulus so far have been to lessen the blow of the pandemic as opposed to promoting growth. As investors question the speed of recovery, the latest stimulus package as proposed by the new President is yet to garner the required support.
As a result, the Dow Jones is now flat on the year, with the S&P 500 adding just 0.8%.
The beacon of light which was the Nasdaq during 2020 continues to provide some optimism, with the index ahead by 3.5% in the year to date. The extra reliance, which the pandemic has underlined in the technology space, has been underpinned by some blowout numbers in the current earnings season from the likes of Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX), with Alphabet (NASDAQ:GOOGL)and Amazon.com (NASDAQ:AMZN) still to come.
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As sterling has held up, tightening pressure on the FTSE 100, and with general investor malaise beginning to permeate sentiment, the index has now given up its gains for the year, and currently stands down by 0.8%.
The year’s early gains, as evidenced by a spike of 6% just in the first week, had been driven by recovery and demand hopes which benefited the likes of the banks and oils. In addition, there had been some signs that the UK was slowly coming back into favour as an investment destination.
For the moment, however, the pandemic continues to cast a dark shadow and the timing of any recovery, economic or social, remains unclear.
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