What’s Boosting the FTSE 100’s Shares Right Now?
25 August, 2019
The FTSE 100 is a key market in the UK, where millions of trades take place per week in an extraordinary scramble to make a profit from small market fluctuations. Over the course of the past year, the UK has seen this market fluctuate perhaps a little more than usual as a result of Brexit negotiations and political instability, which has led some investors to lose confidence in the market’s performance over both the long and the short-term. This article looks at the elements that are creating this instability – and which stocks are nevertheless seeing boosts at the present moment.
As all market commentators are keen to point out, this is not usual trading time at the FTSE 100. The fact that a single political event, statement, vote or resignation can have such effects on the value of stocks and shares is alarming, but that’s a sign of the unusual times that we’re living through in the UK and across Europe.
Meanwhile, there are some causes for hope in the markets, with Brexit fast approaching. While a no-deal Brexit has been unanimously slated in the press as a path to economic misfortune – and analysts confirm that the markets will be rocked by such a Brexit – the fact that this will put an end to the instability and confusion in the markets will be greeted by traders across the floor. There is a sense, now, that certain stocks will actually see a boost following any form of Brexit.
The UK’s Pound has seen a dramatic fall in recent years – thanks, in part, to Brexit. While this hasn’t been a huge cause for concern for currency traders, it’s one of the fundamental driving forces for exports, which are made cheaper for purchasing countries by the fact that their purchasing power is that bit more effective.
One can expect, then, a sea-change in the markets in the wake of Brexit. In the event of a no-deal, the FTSE 100 will likely see some significant drops, but, where firms have prepared for new export deals, and where the government is quick to put in place procedures for trade, exporting companies may well see a boost to their profits.
Look to the Past
Meanwhile, it’s difficult to predict the other economic factors that are likely to impact upon the world of trade, finance, and business health in the coming months – if not days. That’s because of the political instability cited earlier.
However, a sound way to check against certain events is to look through the events of the past – and how they’ve had an impact upon how we trade, profit, and lose cash. The IG UK personal timeline provides a detailed visual analysis of how the FTSE 100, as well as other markets, operates in the wake of certain political or economic policy decisions that are simply out of the control of the markets. Here, you’ll be able to make bets on which industries are likely to flourish given certain Brexit eventualities, guiding your trading more wisely as a result.
In our unstable times, the FTSE 100 is a great indicator of what is to come for the UK economy.