FTSE 100 futures set to slide after BoJo hits pause on UK reopening

The recovery of British blue-chips remains tied to the successful reopening of society, with the FTSE 100 index flopping on Friday after PM Boris Johnson opted to postpone a relaxing of lockdown restrictions amid a rise in Covid-19 cases.

The FTSE 100 ended the week 3% lower, with the index extending losses on Friday, with it falling 1.5% to close at 5897.76 points.

FTSE 100 stutters after Boris Johnson pushes back reopening plans

The catalyst for the FTSE 100 slipping lower this week is British Prime Minister Boris Johnson’s decision to push back his reopening plans by two weeks after a surge in new coronavirus cases emerges in the UK and across Europe.

Johnson regrettably announced that the UK must slow the reopening of the economy, with it time to ‘squeeze that brake pedal in order to keep that virus under control’, he said.

In real terms, this means that the UK government’s plans to reopen leisure centres, gyms, casinos and bowling alleys will be postpone for at least two weeks. After which the government will reassess the situation.

Weak economic data also has hindered UK equities recovery too, with the US economy recording its worst-ever quarterly performance, shrinking by 32.9% from April to June.

‘We’re still digging out of a hole, a really deep hole,’ IHS Markit executive director Ben Herzon said. ‘The second-quarter figure will just tell us the size of the hole we’re digging out of, and it’s a big one.’

UK lenders weigh on FTSE 100, AstraZeneca moves higher still

Its been a tough week for British lenders like Standard Chartered and Lloyds, with the pair publishing disappointing second quarter (Q2) earnings that helped send their share prices lower.

Standard Chartered saw its stock lose 9% of its value this week to close at 385p per share, while its high street peer Lloyds slipped 11% over the last five days to close at 26p per share.

Meanwhile, the British-Swedish drug maker AstraZeneca keeps continues to go from strength to strength, with the stock exceeding analysts price targets for 2020 and looking likely to see its gains continue after its Covid-19 vaccine showed promise in early stage trials.

FTSE 100: technical analysis

The FTSE 100 has yet to see much of a rebound, and continues to push lower, although yesterday’s dip below 6000 was bought, according to Josh Mahony, senior market analyst at IG.

‘If the price can move back above 6050 then another challenge of 6150 may develop, and gains above this level would help to revive a more bullish view,’ he added. ‘A renewed push below 6000 restores the advantage to the bears.’