Tension amid calm as the FTSE 100 awaits new restrictions due to Covid-19
Indecision dominated the first hours of trading the FTSE 100, going from red to green after closing yesterday with a 3.38% drop to 5,804 points on its worst day in just over three months. The benchmark index of the London Stock Exchange is waiting to find out the new restrictions that Prime Minister Boris Johnson plans to announce to curb the second wave of Covid-19.
These new restrictions will affect bars and restaurants and will be a new blow to the tourism sector. Proof of this is that Whitbread, owner of Premier Inn hotels, fell 3.22% early in the morning, while InterContinental Group fell 0.61%.
Whitbread has already announced that it plans to cut up to 6,000 jobs at its hotels and restaurants - about 18% of its workforce - in light of looming restrictions.
Let's see how the FTSE 100 has been trading in recent days, as it has also been affected by the disagreements between the United Kingdom and the European Union in relation to Brexit.
Source: Admiral Markets MetaTrader 5. FTSE100 daily chart. Data range: July 17, 2019, to September 22, 2020. Prepared on September 22, 2020, at 10.30 a.m. Keep in mind that past returns do not guarantee future returns.
As we can see in the graph, the FTSE 100 is supported by the 5,800 point support. It remains to be seen if the new restrictions due to Covid-19 will lead to the London index breaking that support.
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