FTSE 100 falls as traders balance lockdown fears with hopes Boris Johnson can win a Brexit trade deal

The FTSE 100 index was set for a rocky session today as investors balanced the impact on shares of the new England-wide lockdown with hopes Boris Johnson can get a Brexit trade deal signed in the coming weeks.

Company bosses from retail to hospitality and property called on the government to offer more support for businesses as they grapple with the implications of being closed for another month.

The clamour for an extension of the business rates holiday grew deafening this morning as chief executives said the month long furlough extension was not enough to keep their businesses, and payrolls, alive.

Amid the new turmoil hitting companies, the US election also loomed large, with both Donald Trump and Joe Biden campaigning today in the crucial state of Pennsylvania for their final pitch to voters. 

While Biden has been ahead in the polls for weeks, investors are acutely aware that in Pennsylvania and big southern swing states, the Democrat contender’s lead is not big enough to make a Trump win impossible.

The president will be hoping that he can win over enough of Pennsylvania’s large proportion of white working class voters to squeak a victory, while Biden will be campaigning hard to win the hearts and votes of suburban, educated women who seem to be switching from the Republican party this time.

Global markets were set for a mixed session, with the FTSE 100 being called down 5 points at 5572 on the back of the new lockdown rules while the German and French markets were expected to rise, according to trading on CMC Markets.

The FTSE 100 may have fallen further were it not for the fact that news of the new lockdown were leaking into the markets on Friday afternoon as Prime Minister Boris Johnson failed to control those involved in the decision from briefing the media.

There was some hope that western economies would one day emerge from the current gloom as Chinese economic data came through strongly again today. The Caixin manufacturing survey came through at a stronger than expected reading of 51.4 on an index measure in which anything above 50 means expansion. 

Asian shares broadly had a strong session accordingly.

Britain’s trade talks with the EU will continue today, possibly putting a floor under share prices as investors hope for a post-Brexit deal. Word is that there has been some progress on the issue of fishing rights which Britain has made into a big issue despite it making up only 0.5% of the UK economy. 

The government has favoured fishing over financial services in its negotiations despite banks and other City firms providing around 7% of UK GDP.

In the US, shares in Philip Morris and Vaxart may gain when trading opens this afternoon after the Sunday Times reported that Kate Bingham, the head of the UK government’s vaccine taskforce, had told a $200-a-head conference of US investors that the companies’ Covid-19 vaccines were likely to win contracts by the British government. 

Bingham, wife of Boris Johnson’s former schoolmate at Eton, Treasury secretary Jesse Norman, was appointed to the government position despite having no experience in vaccines. She is a venture capital investor and allegedly saw fit to reveal numerous sensitive details of the UK vaccine programme to an audience of paying US investors that had not been disclosed to the markets before.