Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said:
‘’Shares in London have been largely resilient amid fears that the third lockdown will cause another aftershock to an economy already weakened by the Covid-19 earthquake. It’s not surprising given the fresh shutdown had been widely expected, as the rapid march upwards of infection rates continues. The FTSE 100 has opened up slightly and even the FTSE 250 stuffed with domestically focused companies only fell marginally as trading began.
Among the biggest risers on the FTSE 100 was the retailer Next after unwrapping a Christmas sales boost, with the numbers coming in better than expected. The retailer did warn though that costs of the fresh lockdown and its end of season sale could wipe out that festive rise in revenues. The biggest faller during early trading was British Airways owner IAG, amid concerns that an expected surge in bookings and resumption of more normal flight schedules will be delayed further.
Many companies had glimpsed light at the end of the tunnel but now that tunnel appears much longer. Given the new strain of the coronavirus is much more contagious, containing its spread is going to prove even harder so now exit from lockdown will rely on the pace of vaccine roll outs. Not only will Q1 prove exceptionally tough but the whole first half of 2021 is likely to remain a challenge, with recovery pushed back to later in the year. Businesses are now waiting to see what extra support the Chancellor will rustle up later to help them survive the bleak months ahead.’’