Shares and the pound made a positive start to the week, with equities buoyed by a general rise across Europe.
Despite the continuing lockdown of the UK economy in the face of the coronavirus and the severe restrictions the epidemic has placed upon talks over Britain’s future trading relationship with the European Union, London markets were chipper this morning.
Equities shared in a general rise across European exchanges, thought to reflect in part hopes that the virus is starting to come under control. The blue-chip FTSE 100 index was 1.8% higher at 5,512.83, while the FTSE 250, more representative of domestic British business, was up 3.51% at 14,594.41.
“Signs of virus peaking”
Sterling was higher against all major currencies. Its euro value was 0.15% up at €1.1375, while against the yen appreciated by 0.76% to 134.137 yen. Its dollar value was 0.19% higher at $1.2295, keeping the pound well above the psychologically important $1.20 level.
Trade Euro / US Dollar CFD
Regarding stock markets, this morning the Financial Times reported: “Global stocks rallied on Monday, as investors welcomed signs that measures to contain the coronavirus pandemic were starting to bear fruit in some of the worst affected countries.” It added: “The virus has shown signs of peaking in continental Europe, as the daily death toll in Italy, Spain and France slows.”
Brexit talks slowed down
The UK is lagging some European countries in terms of infection rates, and the peak is not expected to be reached until next week. Meanwhile, Prime Minister Boris Johnson, who has contracted the virus, has been admitted to hospital for tests, while the Queen has broadcast to the nation, telling the public: "We should take comfort that while we may have more still to endure, better days will return: we will be with our friends again; we will be with our families again; we will meet again."
For as long as Mr Johnson is out of action, his place will be taken by Dominic Raab who, along with serving as Foreign Secretary, also holds the title of First Secretary of State, making him the senior Cabinet Minister after the Prime Minister. Meanwhile, the virus is slowing negotiations on a UK-EU trade deal. Britain’s chief negotiator David Frost is “self-isolating” having shown some symptoms of the illness while the EU’s chief negotiator Michel Barnier has been diagnosed with the illness.
Discussions have continued over video link but such technology is not well suited to the parallel working groups on a range of complex issues that need to be addressed. Britain left the EU on 31 January but under a transition arrangement it remains subject to EU rules until 31 December. Some suggest the virus means the transition period ought to be extended, but such a move would be resisted by many MPs in the governing Conservative Party who ascribe their victory in December’s election to the party’s clear stance on the issue.