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HIGHLIGHTS
- FTSE 100 stands with a YTD return of approximately 11%
- 5 blue-chip components of index have returned 50-80% in the meantime
- Chances of index breaching 7,500 in 2021 have decreased due renewed worries
London equities have remained volatile in the present calendar year with the benchmark FTSE 100 witnessing a number of sharp downturns following the elongated stretch of Covid-19 pandemic and the repercussions of the delta variant cases. The operative difficulties in the United Kingdom has fuelled the anxiousness throughout the year with more than 20 blue-chip components of the headline index losing over 10% on a year-to-date (YTD) scale.
According to the historical data available with the London Stock Exchange, the FTSE 100 stands with a YTD return of approximately 11%. The sharp correction on the back of renewed Covid worries in the last week, followed by the dismal trading activity in the present week has diminished the YTD gains as the evolving course of Covid-19 continues to handhold the equities and sentiments of market participants.
The widespread emergence of Omicron variant, the detection of suspected cases in England linked to the new variant has furthered the jittery for market participants. The volatility is likely to prevail in the upcoming sessions as the healthcare authorities contemplate the extent of damage due to the newly mutated strain of Covid-19 (SARS-CoV-2) virus, its transmissibility and the acute consequences in the vulnerable patients.
The markets were adequately positioned to register fresh highs on the counter before the arrival of the new variant. But now, the possibilities of FTSE 100 breaching the psychological level of 7,500 in the remaining stretch of terminal month have materially reduced. However, the likelihood of major outbreak in the country is relatively less due to the increased coverage of immunisation and the rapid roll out of booster shots.
With the vaccine makers and other biotech companies examining the new variant, the low-to-moderate response of existing vaccines on the Omicron variant can potentially increase the jittery that can send fresh shockwaves to the markets.
The Medicines and Healthcare products Regulatory Agency (MHRA) giving a go-ahead to the monoclonal antibody is likely to supplement the response of healthcare administration against Covid-19 with mild-to-moderate symptoms. The drug has been found effective in reducing the risk of hospital admission and death in the individuals with mild-to-moderate infection.
Given the heightened uncertainty in the capital markets with most of the European countries either reintroducing mini lockdowns, or exploring the prospects of reimposing stern restrictions, the headline equity indices are expected to remain lacklustre in the near term. On the contrary, there are five blue-chip FTSE 100 stocks that have vastly outperformed the benchmark index, returning between 50% and 80%. Here we take a look at the FTSE 100’s top performers in 2021.
Ashtead Group Plc (LON: AHT)
Shares of London-headquartered industrial equipment provider Ashtead Group have returned a little more than 80% in the 11-month period so far, emerging as the biggest gainer among the pack of 101 components. The stock has appreciated as much as 81% to GBX 6,222 as on 1 December 2021 from the share price level of GBX 3,438 as on 31 December 2020.
The stock has largely risen throughout the year, barring a one-month stretch between the second week of September and October. Shares of Ashtead Group have been on a raging run since touching the multi-year lows in the Covid-steered market crash in March of 2020. From then, the stock has more than quadrupled the shareholders’ wealth, emerging as one of the best FTSE 100 stocks in terms of recovery from Covid bottoms.
Meggitt Plc (LON: MGGT)
Shares of the aerospace & defence components provider Meggitt have returned nearly 59% in the present calendar year with the stock moving to GBX 741 from the market price of GBX 466.5 in the corresponding 11-month period. The stock of Meggitt has more than tripled the investors’ wealth in the pandemic era so far with the shares advancing approximately 245% from the Covid lows.
Other major large-cap components that have returned more than 50% in the reporting period include Entain Plc (up 52% YTD), Glencore Plc (up 59%) and Segro Plc (up 50%). There were a bunch of outperformers, if we consider the YTD performance of shares before last Friday, 26 November, as the leading average corrected 3.6%, sliding from the comfortable level of 7,300 to below 7,050 in a single session.
