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FTSE 100 to backtrack after vaccine blowout, Dow Jones hits new all-time high

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The FTSE 100 is heading for a bit of backtracking on Tuesday morning after making more gains on positive coronavirus vaccine news.

London’s index of blue chips has been called 25 points lower by spread-betters on the IG index, having finished almost 105 points higher at 6,421.29 the day before.

Overnight, Wall Street’s main indices all closed higher, with the Dow Jones hitting its first all-time high since February, climbing over 470 points or 1.6% to 29,950.44.

The broader S&P 500 rose 1.2% and the tech-fuelled Nasdaq Composite added 0.8%.

The change in outlook and market sentiment has been “more than palpable”, said market analyst Michael Hewson at CMC Markets, noting that pessimism about a Covid exit strategy has “transformed into unbridled optimism, that we have a pathway to recovery, and multiple possible vaccine candidates”.

“Despite this unbridled optimism it is also impossible to ignore the current backdrop to the vaccine news, which is seeing a continuation in the trends of rising infection, hospitalisation and mortality rates, across Europe and the US.”

Indeed, the all-time high for the Dow came despite confirmation of an average of 155,442 COVID-19 cases per day over the past week, an increase of 82% from the average two weeks earlier.

California was the latest US state to reverse plans to open up its economy, pulling a state-wide “emergency brake” amid a surge in cases. 

“The situation in the United States is particularly worrisome, with new state-wide restrictions seemingly every day,” said Jeffrey Halley at Oanda.

“The election stand-off is complicating the picture, and it seems inevitable that US economic data will suffer into Q4. America matters as 25% of global GDP.”

Around the markets

Pound up 0.1% at US$1.3215 

Brent Crude Oil up 0.8% at US$44.17

Gold down 0.1% at US$1,887.63

IronRidge Resources appoints new chief financial officer

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