On Tuesday, the FTSE 100 future market posed a tremendously positive sign after the European leader agreed to offer 750 billion Euro recovery package to tackle COVID. The market initially took a good 60 points increment but then came back to its average level after dropping to a low level too.
It is ambiguous that EU stimulus will benefit the UK or not, and thus, the ups and downs can be seen in the market. However, strong chances are this package will benefit sectors and companies which export to EU nations.
On both Tuesday and Monday, the FTSE saw a good initial start but came back before the day closing. On Monday, the rise was due to the optimistic news about the COVID vaccine. Meanwhile, the government also revealed that the UK household finances are worst hit after the 1970s, generating strong fears that customer spending will remain moderate to low in the long term.
Notably, the recovery package will strengthen the price of euro in the Forex market, against the dollar. However, this might decrement the British currency and create obstacles for FTSE 100 organisations that take the EU supply chain.
The largest gainer in the market on Tuesday was Trainline (TRN), which held its positive position throughout the day. But the market picture mixed as the UK economy’s long term future looks uncertain and mixed.