Market Commentary January 2020
05 February 2020
As the coronavirus emerged as a threat to not only the Chinese economy but that of the global economy as well, the FTSE 100 followed other major indices and retreated into negative territory.
The uncertainty as to how far the virus could spread and how bad it might get is causing negative sentiment in the markets. The main index finished the month down 3.4%, giving up all of December’s gains and more.
For the month of January the top 5 FTSE 100 rising stocks were:
- Persimmon PLC +14.5%
- Taylor Wimpey PLC +12.2%
- Barratt Developments PLC +8.8%
- BAE Systems PLC +8.5%
- Berkley Group Holdings PLC +8.4%
Shares in Persimmon PLC led the rise in house builder shares following Taylor Wimpey announcing a 22% growth in its order book for 2019. This combined with more certainty in the sector following the General Election result, fuelled positive sentiment.
For the month of January the top 5 FTSE 100 falling stocks were:
- NMC Health PLC -22.64%
- TUI Group PLC -19.22%
- BT Group PLC -15%
- Royal Dutch Shell PLC -14%
- WPP Group PLC -10.5%
Shares in NMC Health PLC suffered again this month as several large shareholders sold out of the company at a discount to the share price.
Sterling remained relatively flat against the US Dollar and the EURO
On the domestic front, the Bank of England voted by a majority of 7-2 to maintain the bank rate at 0.75% with the caveat that should UK economic growth not improve, interest rates may be cut. At present, the Bank’s projections for interest rates and inflation assume an orderly and tariff free trade agreement between the UK and the EU.
| 31 January 2020 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 7,286.01 | -3.40% | -3.96% | 4.55% | -3.29% | 2.63% | 19.76% | 7.95% |
| GBP/USD | 1.3201 | -0.45% | 8.57% | 0.76% | -6.98% | 4.94% | -7.34% | -12.40% |
| GBP/EUR | 1.1899 | 0.54% | 8.39% | 3.89% | 4.15% | 2.15% | -9.50% | -10.86% |
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 31 January 2020:
FTSE 100: www.investing.com
Currency: www.investing.com
Commodities: www.investing.com
FTSE 100 Risers & Fallers: www.sharesmagazine.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
