By Suyeba Aslam
Your commercial awareness dose
As the year 2020 has finally come to an end, it was deemed to be the worst year for everything in society possible, most especially the economic world. One aspect which had suffered the most was the FTSE 100, due to ending the trading year at 6,460 with a downfall of 1.45 per cent by December 31st. Having to close the year of 2020 with a total loss of 14.43 per cent, according to financial experts at the Financial Times the year of 2020 had been the worst year to come for all financial markets in London since the last financial crisis in 2008.
However, all had not been negative for the blue-chip index as towards the end of the year it was beginning to recover significantly since the peak of the pandemic, which statistics can “show it was a third lower than now”, according to the BBC. Apart from the pandemic there had also been other factors affecting the status of the FTSE-100 which included the deep recession and the never-ending Brexit.
By analysing the rest of the world’s markets, it had seemed to be apparent that it was only the financial markets in London that were heavily affected. The reason for this is because New York’s S&P 500 had been successfully trading alongside Germany’s DAX which had risen up by 3.5 per cent for the year. Irrespective of the FTSE-100 crash at the end of the year, many doors have opened for potential buying opportunities. For example, during a financial crash, the value of stocks decreases, meaning to say that this would be the perfect time for traders and investors to buy shares at lower costs.
With global lockdowns becoming more and more intense over the year, people were now driven to more online shopping. This had resulted in a significant rise of tech stocks with companies such as Amazon, Netflix and Tesla. FTSE-100 owned companies such as Shell, BP and HSBC were among those many companies which had suffered the most, losing approximately one third to half of their market values. As travel bans had been implicated, British Airways and Rolls Royce, both of which are also FTSE owned seemed to have done even worse in comparison.
On the other hand, with lockdowns put in place and everyone is pretty much homebound the food and home improvements industry were other aspects which were booming! Companies such as Ocado, Just Eat and Kingfisher gained significant profits as people had developed a touch for a green finger or were simply too snug within home comforts.
Given the recent news, UK Prime Minister Boris Johnson had announced earlier this week that England will undergo a national lockdown, following the footsteps of Scotland and Wales who had previously announced lockdowns earlier. As a result of the new lockdown or as some would refer to it as lockdown 3.0- many people fear that it will once again have a failing impact towards the FTSE-100 index. However, the British financial market is expected to have a great breakout; with the new Oxford-AstraZeneca vaccine and other pharmaceutical aspects one can see that “The FTSE-100 is the standout performer of the European indices as mining and pharma stocks have boosted the British index,” CMC Markets UK analyst David Madden wrote on last Monday.
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