FTSE hits five-month low amid US stimulus stalemate and rising COVID-19 cases

Kumutha Ramanathan
·Contributor
·2-min read
House Speaker Nancy Pelosi
US House speaker Nancy Pelosi delivers remarks before signing the Paycheck Protection Program Healthcare Enhancement Act on Capitol Hill in Washington, on 23 April. Photo: Tom Brenner/Reuters

The FTSE in London hit a five month low and Asian markets also took a stumble as hopes of a US stimulus deal diminish and COVID-19 cases continue to rise.

The London index recovered somewhat in midday trading after the UK government announced on Thursday new measures to support businesses and employees hit by Tier 2 local lockdown restrictions.

The FTSE 100 (^FTSE) was up by 0.2%. The pan-European STOXX 600 (^STOXX) was down 0.14%. Germany’s DAX (^GDAXI) slumped by 0.2% and France’s CAC 40 (^FCHI) went lower by 0.1%.

READ MORE: UK businesses in Tier 2 lockdowns get extra government support

Chancellor Rishi Sunak told parliament that hospitality businesses in Tier 2 areas would now be eligible for new grants.

The chancellor also announced more generous jobs support for businesses across the UK and doubled grants for the self employed.

Sunak said “open but struggling” businesses in Tier 2 areas could now claim up to £2,100 a month. The grants for businesses in hospitality, leisure, and accommodation will be backdated to August, meaning businesses under restrictions can claim up to £4,200 from today.

Watch: FTSE hits 5-month low

Markets are also coming to terms with a US stimulus deal being unlikely before the November election, despite US House speaker Nancy Pelosi and US Treasury secretary Steven Mnuchin speaking over the phone several times over the last few days.

The Republicans in the Senate want to see a small relief bill of $500bn (£375bn), which is far apart from the $2.1tn bill the Democrats are pushing for or the $1.9trn that the US president Trump said he would sign.

US markets were mixed. The S&P 500 (^GSPC) was flat, the Dow Jones (^DJI) was up by 0.02%, and the Nasdaq (^IXIC) was lower by 0.2%.

Asian markets were also mixed.

Japan’s Nikkei (^N225) was down 0.7%, Hong Kong’s Hang Seng (^HSI) was up 0.1%, China’s Shanghai Composite (000001.SS) fell by 0.4%. The KOSPI (^KOSPI) in South Korea was higher by 0.5%.

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