European stock markets were cautious on Monday as UK prime minister Boris Johnson prepares to deliver his roadmap out of the third national lockdown.
The FTSE 100 (^FTSE) fell 0.62% by noon trade, recovering slightly from deeper losses in the morning, while the CAC (^FCHI) tumbled 0.52% and the DAX (^GDAXI) was 0.59% lower.
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The PM is expected to reopen schools across the country from 8 March and gradually relax rules on socialising in a public space. Reports this morning also said that outdoor gatherings will be permitted again for either up to six people or two households.
“It looks like the roadmap for easing lockdown restrictions is set to cause some disappointment in the world of business and that’s reflected in share price behaviour ahead of the prime minister’s speech,” Russ Mould, investment director at AJ Bell, said.
“The UK-focused FTSE 250 index slipped 1% as investors took the view that the UK economy would only be unlocked gradually rather than a quick flick of the switch.”
Retailer JD Sports (JD.L) lost 2.8% and Games Workshop (GAW.L) lost 1.9%, rail ticket website Trainline (TRN.LR) lost 2.1%, property listings site Rightmove (RMV.L) shed 3% and housebuilder Persimmon (PSN.L) shed 1.2%.
The government has said it hopes to vaccinate all adults over the age of 50 by 15 April.
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S&P 500 futures (ES=F) were down 0.78%, Dow futures (YM=F) shed 0.57%, and Nasdaq futures (NQ=F) were 1.37% lower by midday, as rising bond yields and steepening yield curves prompt some flight out of stocks, after the record highs seen last week.
It comes after US indices slipped or closed flat on Friday. Tech stocks could also see some weakness today against a backdrop of possible antitrust investigations after the UK’s CMA warned it would be conducting a series of probes into the likes of Amazon (AMZN) and Google (GOOG) in the months ahead.
Richard Hunter of Interactive Investor said: “The proposed stimulus package in the US, accelerating vaccine rollouts and surging commodity prices each contribute to the anticipation of economic relief.
“In the US, there has been a small but noticeable rotation out of strong growth stocks such as tech into those which would be immediate beneficiaries of any return to normality. The industrial and material sectors in particular are pricing in strengthening demand as cyclical shares begin to show signs of coming back into fashion.”
A gauge of Asian stocks also edged lower overnight, erasing earlier gains amid a surge in metals that could fan price pressures. Japanese shares outperformed, with the Nikkei (^N225) climbing 0.46% while other key markets lagged.
The Hang Seng (^HSI) fell 1.06% and the Shanghai Composite (000001.SS) dipped 1.45%
Meanwhile, copper (HG=F) hit its highest level in more than nine years in a sign of optimism about a global economic recovery. Brent crude oil (BZ=F) also climbed past $63 a barrel as the market assessed the fallout from the big freeze across Texas and crimped supply.
