FTSE 100 drops on another key Brexit day

September 29, 2020 14:00

The FTSE 100 fell by around 1% in the first hours of the session to 5,877 points on another key day for the Brexit negotiations. Representatives of the United Kingdom and the European Union are expected to resume talks today to salvage the amicable break-up agreement after British Prime Minister Boris Johnson favored a tough exit, without respecting the pact.

Investors also remain concerned about the economic recovery given the increase in restrictions in response to the second wave of Covid-19 infections. Johnson plans to announce a training plan for the unemployed in order to stimulate employment since more than 700,000 people have lost their jobs due to the restrictions.

The new stimuli could be accompanied by tax increases, according to several analysts, given that social spending is skyrocketing.

So far, in 2020, the FTSE 100 has lost around 22% of its value. In the past five years, It only closed in negative in 2018, with a decline of 12%.

Source: Admiral Markets MetaTrader 5. FTSE100 daily chart. Data range: from January 15, 2020, to September 29, 2020. Prepared on September 29, 2020, at 11 am. Keep in mind that past returns do not guarantee future returns.

As we see in the graph, the FTSE 100 has not managed to rally strongly since the general collapse of the stock markets in March due to the coronavirus pandemic.

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