Wall Street escorts late recovery in FTSE 100 as investors eye momentum

Summary

• UK shares traded lacklustre after falling in the pre afternoon deals
• Riding high on Wall Street’s gains, FTSE 100 staged a marginal recovery
• Nasdaq fairly outnumbered the Dow, rising nearly 1.5 per cent 

UK shares traded lacklustre on Monday, 24 May, after falling off the cliff in the pre afternoon deals as investors remained uncertain about the path of economic recovery. The market has seemed to have factored in the prospective growth in the ongoing quarter with the investors’ attention shifting towards upcoming global events as the nations still find it difficult to battle out coronavirus and the mutating nature of virus strains.

The recently-discovered strains are apparently more transmissible as compared to the previous variants. With the World Health Organisation continuing to observe the Covid-19 activity closely alongside the nations, the apex medical advisory and regulatory body has swiftly warned about the rising concerns with regard to the adverse effects of the coronavirus crisis.

Also Read | 4 Stocks to Explore as Sales at Hospitality Venues Soar with Indoor Opening

Back in London, a fresh buying spree was observed on the counter with the investors firing a less-armoured bazooka of premium orders in the late afternoon session tracking the upbeat Wall Street. The tech benchmark Nasdaq Composite fairly outnumbered the Dow Industrials with the former rallying very close to 1.5 per cent in the opening deals.

As per the data available with the New York Stock Exchange, the Dow Jones Industrial Average (DJIA) gained 0.57 per cent to 34,402.07, Nasdaq Composite advanced 1.41 per cent to 13,659.40, whereas the broader share index S&P added 1.02 per cent to 4,198.34.

Also Read | Focus On 3 FTSE Real Estate Stocks as UK Housing Prices Likely to Rise for Next 5 Years

Riding high on Wall Street’s opening gains, the headline FTSE 100 regathered the lost momentum staging a subsequent recovery in the terminal trades. According to the London Stock Exchange, the index rose 0.30 per cent to 7,039.06 from the previous close of 7,018.05.

FTSE 100 chart (24 May)

(Source: Refinitiv, Thomson Reuters)

The mid-cap reflector FTSE 250 oscillated in a closely similar manner with the index trading 0.33 per cent higher at 22,472.27. With most of the companies reporting the quarterly results, the market participants have shifted their focus toward the upcoming cues that can lay the blocks of an evidence-based recovery in the business dynamics.

The Downing Street administration may have started the international leisure holidays along with allowing the street vendors, restaurants, pubs to resume their operations on a larger scale, the dearth of demand in the hospitality sector remains a big reason to worry for the businessowners.

Also Read | 5 Penny Stocks That Have Given Over 600% Return in Last One Year

The activities including capped visitors at football stadiums, several outdoor settings, social gatherings, concerts have restarted but they are yet to witness a meaningful silver lining that can reinstate surety of going concern. The harsh reality is that the hospitality sector is likely to remain humdrum unless it opens for a large section of people as a major chunk of the net yearly revenue is driven by the international travellers, tourists, and interstate visitors.

Resuming international travel to and fro with a handful of nations can only have a short-lived beneficial impact on the economy, as well as on the markets. In order to achieve a growth level beyond the pre-pandemic times, the administration is required to initiate the actions that can be of greater good for the national growth.

However, the authorities are trying to avert a third wave of infections or a major outbreak as it can nullify the extended effort of healthcare systems in vaccinating millions of people in a brief period of little more than five-and-a-half months. With almost completing the first half of 2021, the world is yet to recognise a significant recovery from the Covid-laden implications as some regions have recently reported record-breaking jumps in the rate of daily infections and number of fatalities.