The UK's blue chip index, the FTSE 100, remains subdued as the impact of coronavirus and political wrangling in the US hinders stimulus negotiations. Tradefair brings you the latest financial markets news...
"Despite some positive developments from the likes of Gilead and AstraZeneca on the search for a vaccine, the immediate damage is already being felt in the real economy,"
- Richard Hunter, head of markets at Interactive Investor
The UK's blue chip index the FTSE 100 witnessed a stable, if somewhat lacklustre, start to trading on Monday (October 26), with weak movement on the back of diminishing hopes of a major economic stimulus package in the US.
With a growing number of areas of the UK entering into higher-tier lockdown in the fight against coronavirus, UK economic performance is also likely to suffer in the short term, leading to a further brake on market growth.
Coronavirus restrictions hinder growth
As of 11:50 GMT, the FTSE 100 had fallen by 0.28% in early trading to stand at 5,843.71. The market was relatively stable throughout the morning, held back from making gains as increasing restrictions across the UK and Europe highlight the widespread impact of the disease.
"Despite some positive developments from the likes of Gilead and AstraZeneca on the search for a vaccine, the immediate damage is already being felt in the real economy, with unemployment and the containment of the virus becoming election focal points," commented Richard Hunter, head of markets at Interactive Investor.
Markets remain subdued across Europe, with Germany's DAX index falling by 2.56% today and France's CAC 40 losing 0.84%. Record levels of coronavirus infections are now being recorded in France, Spain and the US, with renewed restrictions on the movement and interaction of millions of people as a result.
The impact these measures will have on economic output in major markets is not yet fully known; however, it's unlikely that a major uplift in trading confidence will be seen while these measures remain in force. This is despite ongoing fiscal stimulus support by governments across Europe.
No progress in US stimulus talks
Total cases of coronavirus in the US have now exceeded 8.7 million, with more than 225,000 Americans having lost their lives to the illness to date. These chilling figures come at a time when negotiations over a new economic stimulus package for the North American nation have stalled.
House speaker Nancy Pelosi and White House chief of staff Mark Meadows have become embroiled in a war of words over recent days, with each accusing the other of "shifting the goalposts" over the proposed stimulus deal.
It means progress in talks to deliver what could amount to trillions of dollars of additional public funding to support hard-hit industries and individuals across the US is now no closer to becoming a reality. This lack of constructive progress continues to weigh heavily on market outlook both in the US and elsewhere.
With the strength of the US economy so closely linked to that of Europe and the UK in particular, any destabilising factors like uncertainty over the full package of measures on the table to bolster US economic performance has a far-reaching impact across the globe.
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