Yahoo Finance FTSE closes lower amid rising UK unemployment and COVID-19 cases
London’s FTSE (^FTSE) reached a new one-week low on Tuesday as the economic fallout from COVID-19 was revealed in fresh national data, with rising virus cases dampening market sentiment.
The blue chip FTSE 100 index was down 0.3% at market close in London on Tuesday. Its European counterparts reversed losses from early trading, with Germany’s DAX (^GDAXI) higher 1.1%, and France’s CAC 40 (^FCHI) almost flat.
US markets also opened higher and remained fairly buoyant in mid-day trading. The S&P 500 (^GSPC) gained 0.6%, while the Dow (^DJI) tilted upward 0.5% and the Nasdaq (^IXIC) jumped 0.4%.
The number of unemployed Brits rose again in the three months to October and redundancies hit a record high, according to the Office for National Statistics’ latest data released on Tuesday. The news added further pressure to European markets.
Despite Monday marking an important milestone in the US as the first citizens began to get the Pfizer (PFE)/BioNTech (BNTX) vaccine, local authorities are still fighting to curtail cases through tightened restrictions. London is facing tougher Tier 3 restrictions from Wednesday. The Netherlands is also under a five-week lockdown that closes non-essentials shops.
READ MORE: UK unemployment rises and redundancies hit record high as London Tier 3 set to boost joblessness
Even the improved mood around Brexit talks in comparison to last week couldn’t bring some respite to markets. The European Union’s chief negotiator Michel Barnier reportedly told ambassadors there could be a deal that’s reached within days as an impasse over major sticking points has been achieved.
He tweeted on Monday that “the next few days are important” and that the key points to striking an accord remain “fair competition, and a sustainable solution for our fishermen and women.”
Ahead of Tuesday and Wednesday’s Federal Reserve meeting, markets are anticipating that the Fed will further ease monetary policy by expanding its bond buying programme, as US lawmakers struggle to agree on a fiscal stimulus package.
There’s progress on that front this week, with a bipartisan group of lawmakers having revealed details of a pandemic-relief package that is separated into two bills.
The first one is a $748bn (£553bn) consensus plan, which includes key consensus points, such as $300bn of small business aid. The second bill includes divisive issues, such as $160bn in state-and-local aid that Democrats have been keen on including.
Senator Dick Durbin, a prominent Democratic leader and one of the bipartisan negotiators, said that while state and local aid and liability — two major sticking points — are “critically” important, he would support voting on the $748bn consensus measure before Christmas as relief is “desperately needed.”
“This is a move for Democrats, who have long said any stimulus deal needed to include a degree of state-and-local aid,” said Deutsche Bank analysts in a note on Tuesday.
The latest Chinese industrial output had little effect in improving market momentum on Tuesday, despite growing in line with expectations in November and also expanding for an eighth straight month as economic recovery gathered pace.
Asian markets were downcast at market close. Hong Kong’s Hang Seng (^HSI) lost 0.7%, and Japan’s Nikkei (^N225) was lower 0.2%. The Shanghai Composite (000001.SS) was also down 0.1%.
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