THE FTSE 100 has climbed to its highest level since earlier than lockdown in March as we speak – the primary full buying and selling day because the post-Brexit deal.
Shares leapt by 2.58% to six,670 this morning in its first day of buying and selling since the agreement was reached on Christmas Eve between the UK and the EU.
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The FTSE 100 has climbed to its highest level since earlier than lockdown in March as we speak
This implies the FTSE is at its highest degree because the shut on March 4 of 6,816, which was earlier than markets began to get spooked over Covid-19.
The primary nationwide lockdown was then introduced on March 23.
The footsie index tracks the efficiency of the UK’s 100 largest corporations, however the FTSE 250 has additionally risen as we speak – up by 2.4%.
As markets closed simply hours after the Brexit deal was introduced final week (December 24), as we speak marks the primary full buying and selling day because the information.
How the FTSE 100 falling impacts your private funds
FALLS within the inventory market can have an effect on your funds in plenty of methods, right here we clarify how.
Pensions – In the event you save money right into a pension scheme the place the supplier invests your cash, you may doubtless see the worth of your pension drop when the FTSE 100 falls.
However take into account that with retirement financial savings, you’re investing for the long-term so the drop in worth isn’t more likely to be everlasting.
As an alternative, you’ll see your retirement financial savings develop once more as soon as the inventory market recovers.
Financial savings and mortgages – There isn’t a direct hyperlink between the inventory market and your mortgage or financial savings accounts.
But when panic on the inventory market spreads to the broader economic system, the Financial institution of England could reduce rates of interest. Rates of interest are at present held at 0.1%.
This implies your mortgage is more likely to get cheaper, whereas savers will endure from decrease rates of interest.
We’ve defined how the interest rate cut will affect your finances here.
Sterling – The worth of the pound typically rises if the FTSE 100 falls.
It’s because lots of the corporations on the index earns a big amount of money within the US.
However once more, alternate charges are additionally risky and there are numerous components that make them rise and fall.
The markets have additionally doubtless been boosted by information of vaccine rollouts, as probably the most susceptible within the UK proceed to obtain the jabs.
Shares in pharmaceutical agency AstraZeneca have soared, which follows information that its vaccine is expected to gain UK approval in the coming days.
In the meantime, banking shares continued to tumble, nonetheless haunted by the influence of the coronavirus on the economic system.
The 4 largest fallers within the FTSE as we speak have been Lloyds, Barclays, HSBC and Natwest, with Lloyds shares dropping 4%.
But Russ Mould, funding director at AJ Bell, mentioned the markets appear to be “welcoming the Brexit deal”.
He added: “Nonetheless, the settlement struck between London and Brussels is but to win common acclaim, even when that’s the inevitable results of the compromises that the Prime Minister needed to make.
“A double-dip recession, due to new viral strains and maybe extra stringent lockdowns, may put fairness traders on the again foot.
“Even when the FTSE 100 is down by a sixth from its August 2018 and January 2020 highs, the index is up by 30% from its March 2020 nadir of 4,994, so a point of restoration is already anticipated.
“A profitable vaccination programme may unleash animal spirits within the type of company funding and elevated non-public consumption, resulting in a speedy financial bounce again, particularly now a number of the Brexit uncertainty is lifting.”