UK100 index posed for fifth consecutive decline
22 September

UK100 index posed for fifth consecutive decline

London shares continued to fall this morning, suffering their worst sell-off in more than three months after new lockdown restrictions were put in place jeopardising UK’s slow economic recovery. The blue-chip FTSE 100 index continues to fall, posed for the fifth consecutive day of decline as yesterday’s 3.5% loss extends further towards 5800. Sterling also remains fragile at $1.28 amid fresh restrictions and newly anticipated redundancies, mainly from the hospitality industry.


A resurgent dollar held on to sharp gains after virus fears and worries over delays in fresh US stimulus drove a wave of selling in most markets. A public holiday in Japan kept moves in the Asia session modest and calmer trade in equity markets also took some of the pressure off riskier currencies. The Australian dollar suffered when a senior central banker mentioned negative rates as a policy option in a speech to trade at $0.719 while the euro suffered an even greater decline to change hands at $1.1736. Gold also fell, testing the $1900 per ounce support.


Parties in Italy’s ruling coalition, led by the anti-establishment Five Star Movement and the center-left Democratic Party, are projected to hold on to three regions including the leftist bastion of Tuscany and Puglia in the south, in elections held Sunday and Monday. The outcome of the vote strengthens Premier Giuseppe Conte's grip on his difficult coalition ahead of negotiations over the European Union’s recovery fund, with voters boosting the government’s position after a nationwide referendum overwhelmingly backed by the electorate to reduce the number of seats in parliament to 600 from 945.


France warned that any British violation of the Withdrawal Agreement would end the push for a free-trade deal. With the fallout from the UK government's plan to unpick the agreement affecting the mood, this week will see informal contact between the two sides before a full negotiating round next week. European affairs ministers of member countries meet today to discuss the increasing number of infections, Brexit and EU budget.



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