FTSE slides as cases keep rising in US and the UK

Five US states are seeing a significant and persistent pick up in the number of new cases while in the UK the north of England doesn’t seem to be able to get the spread of the virus to a low enough level.

Downtrend 5

Five US states are seeing a significant and persistent pick up in the number of new cases while in the UK the north of England doesn’t seem to be able to get the spread of the virus to a low enough level, even as the infection rate in the south seems to be petering out. This has put a cap on any recovery among property firms, travel companies and utilities, weighing the FTSE 100 down despite the reopening of the high street this week.

Property developer Taylor Wimpey dropped more than 5% after it placed an additional £515 million worth of shares on the market to finance buying development land. This market came close to a standstill during the pandemic with the smallest amount of land being put on sale in the last 20 years. Now that it is stirring back to life Taylor Wimpey is looking to take advantage of cheaper prices. The firm’s shares have made significant progress from a  plunge to 101p in March but still have a long way to go before trading back at this year’s high of 237p. Other developers including Persimmon and Barratt Developments also lost ground in early trade.

National Grid warned that the coronavirus may wipe out £400m of profits this year but the share declined relatively modestly because the company proposed to keep the dividend in line with policy.

Oil prices drop as US supply levels rise

Later today the US jobless numbers will be key, not only for currency traders but also for oil. WTI prices have been under pressure this week because stock levels in the US are still rising but the recovery in the US job market will also play a key part in balancing out the surplus oil in the US market.

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