LONDON, June 27 ― A rally in consumer stocks and a battered pound helped London's FTSE 100 outperform world stocks at the end of a choppy week yesterday as investors weighed optimism about a revival in business activity against a surge in global coronavirus infections.
Broader Europe and Wall Street were firmly in the red on fears of further restrictions to business activity which could cast a pall on hopes of any economic recovery.
London's blue-chip FTSE 100 closed up 0.2 per cent but a defensive rally showed evidence of investor worry. British American Tobacco, Reckit Benckiser, Unilever and Tesco were among the biggest boosts.
The pound, meanwhile, slid on doubts about Britain's trade pact with the European Union. This helped gains in some of the internationally focused companies on the blue-chip index. Investors will be watchful of the next round of Brexit talks set to begin on Monday.
On the week, the FTSE 100 fell 3.2 per cent. The index has recovered more than 35 per cent since March lows but is still down about 18 per cent this year. Researchers warn of a second wave of infections as the government looks to ease further lockdown restrictions next month.
“There are still big question marks over how willing households will be to go out and spend if fear of the virus lingers. And we are concerned that a second wave of unemployment will reduce the ability of households to spend,” said Ruth Gregory, senior UK economist at Capital Economics.
“As a result, we suspect that the initial strong rebound will peter out in the second half of 2020 and that the government and the Bank of England will need to do more.”
Britain's mid-cap FTSE 250 ended yesterday flat.
Gains in online gambling firm 888 Holdings on upbeat core earnings forecast, were offset by losses in some travel stocks and carmaker Aston Martin which slipped after issuing a weak forecast and announcing a stock offering. ― Reuters
