On Thursday, the UK stock exchange, FTSE100, put a brake on its upward rally after the Bank of England expects a more extended period for recovery of the nation from coronavirus pandemic. The index was further dragged by the British firm, Glencore, which abandoned its yearly dividend to pay off its debt.
The company also booked an impairment charge worth $3.2B and thus the commodity giant, Glencore, plunged 8.1%, taking the FTSE100 down by 1.3%. Other shares in the similar industry presented a similar scenario including Rio Tinto, BHP, Royal Dutch Shell, and British Petroleum, after presenting a good bull run on Tuesday earlier.
The Bank of England also said that the UK economy would not be able to recover to the pre corona level until the end of 2021, which is longer than its previous forecast about national recovery. However, the bank’s forecasts for 2020 were less harsh than it did in May.
FTSE250, mid-cap index fund, was also 0.9% down with financial and industrial sector stocks suffering the most. Barratt Developments, Persimmon, and Taylor Wimpey also lost between 3.7% and 4.3%.
Despite announcing an economic package, the UK’s FTSE100 is still 20% down in 2020 as the massive surge in corona cases raising the further chances of another lockdown as compared to the United States’ S&P500 which is 3% up this year amid another economic package hopes.
Among the few exceptions that surged in Thursday rally, Aviva Insurance was the best performer with a 4.6% increase as the company announced to reduce its Asian and European focus.