UK stock markets are likely to start largely flat on Friday, 19 February, tracking the downbeat global cues with Japan’s Nikkei 225 settling in red for the third consecutive day. The futures linked to the benchmark FTSE 100 index traded marginally higher in positive territory indicating a seemingly horizontal start to the London equities. After Monday’s sharp spike of a little more than 2.5 per cent, FTSE 100 has ended in the negative region for three straight sessions, losing over 2 per cent.
Global equity check
The Dow Industrials closed slightly lower on Thursday at 31,493.34, down 119.68 points, or 0.38 per cent, from the previous close of 31,613.02. The broader US benchmark S&P 500 and the tech-heavy index Nasdaq Composite shed 0.4 to 0.8 per cent at the close.
Back in Europe, the major indices including Germany’s DAX, France’s CAC 40, Italy’s FTSE MIB, Spain’s IBEX 35 and Switzerland’s SMI slipped up to 1.2 per cent with the DAX witnessing the least fall and FTSE MIB registering a drop of 1.11 per cent on Thursday, 18 February.
Mixed equity sentiments were seen in the Asian markets on Friday with Hong Kong’s Hang Seng trading over 0.1 per cent lower, China’s Shanghai Composite hovering 0.5 per cent higher and South Korea’s Kospi oscillating nearly 0.7 per cent higher.
GBP nears 1.40
The Great Britain pound (GBP) has been trading near the 1.40 levels against the United States dollar (USD). Around 0717 GMT, the GBP vs USD pair was hovering 0.07 per cent higher at 1.3979 at the interbank foreign exchange market on Friday. The unit of GBP settled at 1.3971 USD on Thursday.
During the day so far, the currency pair has shuttled between a high and low of 1.3984 and 1.3952, respectively. The Bank of England had fixed a reference currency conversion rate of 1.3853 USD and 1.1513 EUR against a unit of sterling on 17 February.
The elongated vaccine optimism has seemed to have faded marginally regenerating the Covid-19 uncertainty as most of the larger economies are still not able to contain the spread or break the chain of virus even with the ongoing inoculation programme.
Domestically, investors are more skewed towards the corporate earnings and the upcoming announcements in the Budget scheduled to be presented by the Chancellor of the Exchequer on 3 March 2021. However, the London equities have had an eventful February with the headline FTSE 100 rising more than 5 per cent barring the recent drop of the last three days.
The forthcoming disclosures by the government about the persisting rate of infection, number of increasing hospital admissions, and the exit roadmap from the national lockdown is likely to weigh on domestic markets.
Most of the businesses that were mandatorily required to shut their partial or complete operations during the third national lockdown are expecting to restart with revamped operating procedures. The Dampened demand in the hospitality and other services sectors have had a disastrous impact on the top lines of the enterprises.