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Wednesday, December 6, 2023

FTSE 100 reaches highest level since March crash

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Traders cheered on as the FTSE 100 reaches a 9-month high after the Brexit UK-EU deal passed.

London’s top index was 2.3 per cent, or 149.4p, higher at 6,651p after investor sentiment lifted following the Christmas break.

All UK markets entered positive territory following the news, with the FTSE 250 up 2.4%.

Pharmaceutical company AstraZeneca made strong gains as investors increase sentiment in hopes of vaccine success. It seems the optimism of the forthcoming vaccine is what’s keeping the market up.

Russ Mould, investment director at AJ Bell, said the markets seem to be “welcoming the Brexit deal”.

“However, the agreement struck between London and Brussels is yet to win universal acclaim, even if that is the inevitable result of the compromises that the Prime Minister had to make to get the deal over the line before the end of the transition period and confirmation of the UK’s departure from the economic bloc,” he added.

“A double-dip recession, thanks to new viral strains and perhaps more stringent lockdowns, could put equity investors on the back foot.

“Even if the FTSE 100 is down by a sixth from its August 2018 and January 2020 highs, the index is up by 30 per cent from its March 2020 nadir of 4,994, so some degree of recovery is already expected.

“A successful vaccination programme could unleash animal spirits in the form of corporate investment and increased private consumption, leading to a rapid economic bounce back, especially now some of the Brexit uncertainty is lifting.”

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