FTSE 100 gives up gains despite S&P 500 hitting all-time high
The US’s S&P 500 stock index hit an all-time high before slipping back along with the FTSE 100 and other global markets amid rising US-China tensions.
The S&P 500 rose to 3,395 points, topping a high it hit in February, having been boosted by record levels of stimulus. But the index reversed course and slipped 0.1 per cent in early trading.
The FTSE 100 returned to the red amid worries about coronavirus cases around the world and US-China tensions.
London’s blue-chip index was down 0.8 per cent in afternoon trading at 6,077 points. The FTSE 250 index of smaller, more UK-focused firms also fell 0.7 per cent.
Read more: UK savings rates halve since coronavirus lockdown
In Europe, Germany’s Dax slipped 0.4 per cent and the continent-wide Stoxx 600 fell 0.6 per cent.
FTSE 100 reverses course
The FTSE 100 index reversed course in afternoon trading as US-China tensions took the shine off the rally.
Investors’ nerves got the better of them after the Commerce Department yesterday announced more restrictions on Chinese tech giant Huawei.
“Just when you thought things were cooling off between the US and China, Washington goes and pokes the dragon,” said Connor Campbell, financial analyst at Spreadex.
Globally exposed stocks dropped. Asia-focused bank Standard Chartered fell three per cent, while Intercontinental Hotels fell 3.1 per cent.
Persimmon was the biggest riser after it said it had seen a roughly 50 per cent increase in average weekly private sales rates per site. Its shares rose 6.6 per cent.
US stocks in astonishing surge
In the US, the tech-heavy Nasdaq index hit a new record high in June as technology firms such as Apple, Amazon, Google and Netflix surged.
The benchmark S&P 500 took longer, but broke into record territory once again today before slipping back. Its meteoric rise in recent months has been boosted by record amounts of stimulus being pumped into the economy by the government and the Fed.
It is now up around 55 per cent from March’s lows. The S&P 500’s technology index has climbed around 25 per cent this year.
Yet the atmosphere on US markets quickly soured along with that in markets like the FTSE 100.
The long-running talks over the next round of US fiscal stimulus, which have been a central focus of investors, continued. Senate Republicans now plan to introduce a scaled-back bill, according to Bloomberg.
But David Madden, market analyst at CMC Markets, said: “Traders are not holding their breath that anything will be approved soon.”
Market sentiment was also tempered by rising coronavirus cases around the world. They have worried investors as they could potentially derail an economic rebound.
Figures from the European Centre for Disease Prevention and Control yesterday showed that Luxembourg and Spain have reported more than 100 new cases per 100,000 people over the past two weeks.
Cases are also high in Malta, Belgium, France and the Netherlands. It has already hit European tourism, with the UK taking various countries off its “travel corridor” list.