FTSE 100 holds steady as vaccine caution grows

12 Jan 2021

FTSE 100 trading got off to a flat start on Tuesday as caution grows amongst investors in relation to the coronavirus vaccine rollout.

The index was down 21 points (0.3%) at 6.777, with the pound gaining three-quarters of a cent against the dollar at US$1.3591.

According to Russ Mould, the investment director at AJ Bell: “After an impressive start to the year, equity markets are finding it harder to push ahead this week amid growing expectations for the Federal Reserve to start easing back on its monetary support measures towards the end of the year; however, expectations could easily change if the pandemic continues to trouble the US for months to come.

“We’re in a period where investors are trying to get their head round what could happen next,” Mould warned.
Elsewhere, in the UK, although the rollout of the coronavirus vaccines is progressing, some traders have shown concern on news that Conservative MPs are urging the PM to set a fixed date to end the current lockdown measures.

Although the number of new cases is now around 50,000 a day, the Covid Recovery Group of MPs who have questioned the present restrictions are pushing for a date of 8 March for the current restrictions to be eased, reports Evening Standard, despite only 15m people having received the vaccine by that date.

On Wall Street, tech stocks were the hardest hit over fears of political intervention aimed at social media firms following the Washington riots last week.

The Nasdaq Composite closed 1.55% lower on Monday, reports Proactive Investors.

“Markets touched on the brakes as political concerns weighed in the U.S. and as big tech gave up some recent gains,” stated Richard Hunter, head of markets at Interactive Investor.
“Whether the incumbent president will face consequences after last week’s unrest remains to be seen, but in any event, the spotlight is being shone on social media, despite the likes of Twitter and Facebook having banned his account.
“The feared outcome of a Congressional review of social media underlined the broader concern that for big tech, increased regulation is on the way,” he added.