FTSE 100 dips as coronavirus infections come back into focus
![](https://www.cityam.com/wp-content/uploads/2020/11/Landmarks-Are-Eerily-Quiet-As-People-Heed-Warnings-Not-To-Congregate-Due-To-Coronavirus-scaled.jpg?w=742)
The FTSE 100 has fallen for a second day as investors return their focus to rising coronavirus cases and new restrictions after positive vaccine news boosted global markets.
London’s blue-chip index was down 0.5 per cent shortly after the open, taking it to 6,336 points. The FTSE 250 of slightly smaller firms was 0.2 per cent lower.
Stocks were mixed in Asia overnight. Japan’s Nikkei 225 fell 1.1 per cent but China’s SSE Composite rose 0.2 per cent as the government hinted at further fiscal stimulus.
Equity markets have soared so far in November. Trial results that showed Moderna and Biontech and Pfizer’s vaccines were more than 90 per cent effective against coronavirus caused jubilation on trading floors.
In what’s become known as the “reflation trade”, investors turned to unloved sectors such as financials and industrials that are set to benefit most from a return to normality.
FTSE 100 weighed down by economic worries
However, these dynamics have reversed somewhat in the last two days. The realisation that economies are still set for a tough winter of rising Covid cases and lockdowns has caused a rethink.
“The FTSE is opening on the back foot after a lower close on Wall Street following weaker US retail sales,” said Fiona Cincotta, market analyst at City Index.
“Signs that resurging Covid cases and the lack of fiscal stimulus is impacting on the US consumer was enough of an excuse for vaccine optimism to fade and stocks to drift lower.”
The FTSE 100 undeperfomed its peers in the last session, falling around 0.9 per cent, in part because of a stronger pound due to Brexit optimism.
Both the EU and the UK have hinted that a trade deal is close. The pound has duly risen and was up again this morning 0.2 per cent to $1.329.