FTSE makes muted start as vaccine hopes lose some of their restorative effect

“It seems vaccine hopes aren’t having quite the same restorative effect on the markets as they did earlier this year.

“Investors, rightly, are not getting carried away at every little development on what effectively is the world’s fastest route out of the pandemic despite Pfizer’s candidate rolling off the production line and reported hopes that the UK could get 40 million vaccines by the New Year,” says AJ Bell Investment Director Russ Mould.

“Some positivity is coming from Chinese retail sales and GDP figures – compared with the sort of growth it has put up in the past, a jump in GDP of just under 5% might not be that impressive but it would be the envy of many economies in the developed world.

“The FTSE 100 was up 0.3% to 5,939 as trading got underway at the start of the week, following on from a strong showing in Asia and amid gains elsewhere in Europe.

“Along with China’s recovery and vaccine developments, the other key catalyst for markets since their March nadir has been the stimulus launched by central banks.

“Investors should get some insight into their thinking with the head of the US Federal Reserve, the European Central Bank and the Deputy Governor at the Bank of England all due to deliver separate speeches later on Monday.

“The Brexit issue continues to rumble away in the background although the reaction in the currency markets suggests the UK’s ‘no deal’ talk is seen as sabre-rattling rather than an indication that negotiations are doomed.

“Gold prices remain short of their late summer highs but remain above $1,900 per ounce as investors continue to seek out the precious metal’s safe haven appeal.”

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