Market Commentary February 2021
02 March 2021
In February, the vaccine rollout for COVID-19 continued at speed in the UK which created optimism in the market.
Following the success of the continued vaccine rollout, a ‘cautious but irreversible’ route map out of lockdown was announced by Boris Johnson. This announcement has helped to provide a light at the end of the tunnel. However, the last trading day of February saw a decrease of 2.5% in a day, due to fears about rising inflation. This was the biggest fall out of all the European markets. Despite this, the FTSE 100 ended the month up 1.19%.
Although the FTSE 100 is higher than the levels it saw a month ago, it remains lower than the levels it saw in February 2020, prior to any lockdown restrictions being put in place to curb the spread of coronavirus.
For the month of February the top 5 FTSE 100 rising stocks were;
- International Consolidated Airlines Group SA 41.49%
- Antofagasta 25.29%
- Natwest Group 22.98%
- Prudential 22.78%
- Whitbread 22.42%
In February, the International Consolidated Airlines Group increased their liquidity by £2.45 billion, meaning they now have total liquidity of 10.3 billion Euros.
This was achieved through a loan deal and deferred pension deficit payments in order to endure the coronavirus pandemic. The company has said it is continuing to explore other options to improve their liquidity. Despite this, International Consolidated Airlines Group ended the month on Friday by announcing a 7.4 billion Euro annual operating loss.
For the month of February the top 5 FTSE 100 falling stocks were;
- Ocado Group -21.64%
- Just Eat Takeaway.Com -15.85%
- Fresnillo -14.96%
- Polymetal International -13.12%
- Experian -12.01%
In 2020, the Ocado Group saw positive performance as the demand for its products and services grew, despite the pandemic. However, even with this growth, Ocado Group is still a loss-making company.
Another issue that caused doubt in the Ocado Group shares is the potential digital sales tax which could have a negative impact on earnings. In addition, the positive news about the easing of the coronavirus restrictions caused the Ocado Group share price to drop as it is likely that people will be less reliant on online sales as they begin to feel more comfortable shopping in physical stores again.
Throughout February, Sterling continues to be steady against the Euro and the US Dollar increasing 2.4% and 1.98% respectively.
| 28 February 2021 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 6,483.43 | 1.19% | 8.72% | -1.48% | -8.36% | -10.35% | -10.74% | 6.34% |
| GBP/USD | 1.3973 | 1.98% | 4.52% | 8.99% | 5.37% | 1.55% | 12.86% | 0.41% |
| GBP/EUR | 1.1558 | 2.40% | 3.20% | -0.59% | -0.91% | 2.42% | -1.26% | -9.70% |
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 28 February 2021:
FTSE 100: www.investing.com
Currency: www.investing.com
FTSE 100 Risers & Fallers: www.investing.thisismoney.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
