FTSE 100 segment has been showing an active movement recently. The top 100 LSE listed companies are known for their highest market capitalization. The framework on this index is Free-float, and it owns a base value of 1000 for the past three decades.
Being an indicator of prosperity in the UK, this financial pulse of the UK has somewhat shown certain peculiar signs of late. The Pandemic has not justice to the Index movement either. The indices showed a mingled response FTSE 100 on varied industry segments. Even though the beginning of the year 2020 was a little dismal 13.59% decrease, the traders hoped that FMCG and the essential services sector would give an upward push to this FTSE 100 indices.
With Pandemic showing no signs of relief and vaccination still a long way ahead, the heaviest Pound-holder land promised no reprieve for the FTSE 100 as it still posted 196 points at 4,993 as a downward drift. On Monday, the laggard FTSE 100 closed 3.8% lower among the equity market, picking up the selling side. The selling in equity markets results from the virus spreading far and wide, with count going up each passing day.
With more government restrictions being imposed, this also had an adverse impact on FTSE 250 that covers a broader network of Britain’s blue-chip segments, plummeting to 13,078. Different market speculators have been observing these trends with no specific solution in sight, at least not for the short term for sure. The Regulatory or Govt’s subsidies or brownies to rescue the industry have not had the desired effect. A slight increase in FTSE 100 though was posted, it shown faded away heading south again.
The downfall of auto majors like Melrose Industries PLC (LON: MRS) is not viewed as a surprise either as the travel has been curtailed drastically. Even the purchasing inclination and lifestyle changes have done no justice to the consumer segment bringing down Supermarket Hargreaves Lansdown PLC (LON: HL), down by 15%, at 1,189.5 points. Media companies have not fared well either.
Terrestrial broadcaster ITV PLC (LON: ITV) showed no hopes of crashing at 8.4% to 59.28 points. Advertising majors, too, do not have any good news to share. Most of the advertising giants like Read ITV have pruned their dividends and new year perquisites considering the disappointing sales. More and more firms joined the league of cutting down on dividends. The Oil Major Royal Dutch Shell (LON: RDSB) barely survived being down 3.6% as Brent crude performed dismally at US$25.81 a barrel.
As reported by Murray Gunn, CEO of Elliott Wave International, “The freebies offered by Federal are not going to do any sort of bandaging to restore the economy.”
However, many skeptics have viewed the Federal Government and market regulators’ endeavors, quoting them as quite dynamic and in the public welfare. Repeating such statements can only be counted as over-optimistic as the health crisis still looms large with no concrete solution in sight.
Keeping the optimistic sentiment alive, the government stimulus is being viewed as a catalyst in restoring the recession. FTSE 100 is emerging at the end of the first quarter of the new year, heading to peak performance. However, compared to Asian counterparts, Britain has taken a longer route to come off the crisis, as is evident from the Footsie (a nickname for FTSE 100) indices.
Early this morning, The Dow Jones index was still on the downside with 370 points (1.9%) at 18,804, and the S&P was off 51 points (2.2%) at 2,254. At LSE, FTSE 100 showed no encouraging signs and was down at 5,023 points.
On a busy morning on Wednesday at 8.50 am, it was another bad day for FTSE 100 with 4963.07 points. Companies like Ferguson and Smiths, too, could barely survive the blow. Considering batter major like Bacanora Lithium PLC (LON: BCN), the good news is shared as the mobile, and electric segments have done well with prime focus on the closure of engineering projects. With an emphasis on the health segment gaining momentum, companies in medical and organic research seem to have weathered the blow well.
To sum up, FTSE 100 may need to be more watchful for the whole week as the bloodbath is here to stay. If you wish to garner gains, this is the time to buy and focus on a 5 to 10-year plan.
