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FTSE 100 skids 3%, GBP sheds 2.4% as new Covid-19 strain hits market
UK stock markets retreated on Monday, 21 December, with the benchmark stock index FTSE 100 and the Great Britain pound (GBP) suffering declines from their respective multi-month highs. The eruption of the new coronavirus strain has once again stalled the seemingly-smoothing function of the United Kingdom as more than a dozen of countries have barred the to and from flights to Britain with France prohibiting the freight services.
Virus strain hits market
The renewed concerns over the mutated virus strain with a higher transmission rate alongside the fears of already-tight-lipped proceedings with regard to the binding trade arrangement between the United Kingdom and the European Union have battered the market sentiments. The previous uncertainty due to the ongoing Brexit trade talks has seemingly increased as we move ahead in the holiday-shortened week.
The government has revealed that the infection of the recently discovered virus strain has been multiplying at a faster-than-expected rate. The health authorities have been investigating the nature of the virus strain and the extent to which it is potentially stronger or weaker as compared to the already-existing form of coronavirus.
Markets witness ‘mini crash’
The headline FTSE 100 index re-coiled more than 3 per cent in the trade today following the immediate travel crisis that has forced the administration to implement stricter restrictions. The index has surrendered nearly half of the gains recognised in current month with the 3 per cent plunge on Monday. In the afternoon deals, FTSE 100 tried to bounce back but fell back to the morning levels failing to sustain marginal recovery.
According to the data available with the London Stock Exchange, the FTSE 100 dropped 3.28 per cent to a weekly low of 6,315.34 from the previous closing level of 6,529.18. The wider stock indices followed suit on Monday with the FTSE 250, FTSE 350 and FTSE All-Share falling 3.61 per cent, 3.19 per cent and 3.22 per cent, respectively.
FTSE 100 (21 Dec)
(Source: Refinitiv, Thomson Reuters)
GBP nosedives vs USD
In a market-wide collapse, the pound sterling wasn’t able to remain unaffected. The Great Britain pound also slipped in a largely similar manner as compared to equities on Monday. According to the data available with Reuters, the GBP to USD pair was trading at 1.3300, down 1.63 per cent on 21 December at around 15:09 GMT. During the mid-morning trades, the GBP vs USD pair crashed as much as 2.44 per cent to an intraday bottom of 1.3190.
GBP vs USD (21 Dec)
(Source: Refinitv, Thomson Reuters)
At the close of US markets on 18 December, a unit of pound sterling equalled 1.3520 US dollars. The Bank of England (BoE) has fixed a spot exchange rate of 1.3485 USD vs a unit of GBP on Friday, 18 December. Following the persisting uncertainty in the markets, the cryptocurrencies also bled on Monday with bitcoin falling more than 3 per cent to a level below $22,000.
Commodities check
Meanwhile, in the commodities market, gold traded largely flat with an ounce of gold equalling $1,881.56, up 0.05 per cent. The Brent crude oil fell as much as 3.73 per cent to $50.38, while the NYMEX crude oil slumped 3.96 per cent to $47.23 per barrel.
