Market Commentary August 2020
03 September 2020
It was a tale of two halves for the FTSE 100 index in August.
Strong earnings reports saw the main index rise by 4% during the first couple of weeks. However, a combination of new Government travel restrictions on the likes of France, rising coronavirus infections and negative sentiment from the US Federal Reserve on the pace of the US economic recovery, saw most of these gains erased later in the month. The index did however finish 1.12% higher for the period.
UK stocks digested the latest employment data showing that the number of people in work for the 3 months to June fell by 220,000, the biggest quarterly decline since the global financial crisis over a decade ago. The UK economy also recorded a steeper second quarter contraction of any major country.
For the month of August the top FTSE 100 rising stocks were;
- International Consolidated Airlines Group S.A. +23.32%
- Aveva Group Plc +20.13%
- Intercontinental Hotels Group PLC +18.79%
- JD Sports Fashion PLC +17.82%
- GVC Holdings PLC +17.23%
Investor sentiment that shares in British Airways owner International Consolidated Airlines Group S.A. will rebound made the shares one of the most bought in August. This demand led to a steady rise in the share price.
For the month of August the top 5 FTSE 100 falling stocks were;
- BP PLC -11.71%
- Hargreaves Lansdown PLC -10.32%
- Standard Life Aberdeen PLC – 9.08%
- National Grid PLC –8.65%
- United Utilities Group PLC –8.56%
With the stock going ex-dividend and new travel restrictions coming into play, shares in BP retreated.
On the currency markets the pound continued to strengthen against the US dollar as the Bank of England maintained the bank rate at 0.1%
| 31 August 2020 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 5,963.57 | 1.12% | -9.38% | -17.26% | -19.76% | -19.74% | -12.06% | -4.55% |
| GBP/USD | 1.3364 | 2.09% | 4.24% | 9.92% | 3.09% | 3.35% | 1.72% | -12.90% |
| GBP/EUR | 1.1195 | 0.78% | -3.72% | 1.20% | 0.20% | 3.11% | -4.92% | -18.17% |
This newsletter is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action.
Figures refer to the past and past performance is not a reliable indicator of future results. You may not get back the full amount of your investment.
Sources of information as at close of business 31st August 2020:
FTSE 100: www.investing.com
Currency: www.investing.com
FTSE 100 Risers & Fallers: www.sharesmagazine.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
