Why is the FTSE 100 falling today? Will the stock market crash?

At 12:55 PM today (July 19), the FTSE 100 index fell more than 150 points and 2%, reaching a two-month low of 6844.11.

This comes after the stock index closed at 7008.09 on Sunday, July 18, with the abrupt dip that happened this morning as people living in England woke up for Freedom Day and the lifting of all legal coronavirus restrictions.

Despite the optimistic undertones of the UK government’s decision to lift rules around face masks, social distancing, indoor gatherings and more, the move has been marred by skepticism and fears for the UK’s overall economic stability.

With the impact of the pandemic and repeated lockdowns still being felt by businesses in all four UK countries, the country also recorded 50,000 new Covid cases in one day on Friday, July 16.

The rapid rise in the number of cases follows Health Minister Sajid Javids’ statement that lifting the restrictions from 19 July could bring more than 100,000 new cases a day in the UK.

Prime Minister Nicola Sturgeon tweeted yesterday to warn that Freedom Day in England should not be treated as a sign that the pandemic is over, saying: cases in [Scotland] fall but are still too high to fully relax restrictions in Scotland as they have been below the limit.

Here’s what you need to know.

The Financial Times Stock Exchange, also known as the FTSE 100, FTSE Index or Footsie, is the UK’s leading stock index and represents the top 100 blue chip companies listed on the London Stock Exchange by market capitalization.

It includes major UK companies such as Barclays bank, Lloyds Banking Group, Burberry, BP, BAE and AstraZeneca.

The FTSE, which is maintained by the London Stock Exchange Group, is generally seen as an indicator of general economic and market performance in the UK, with the rise or fall in shares generally representing general market trends in the UK.

The FTSE tumble is a sign of renewed fears from investors and market observers that the rise in Covid-19 cases, coupled with the lifting of restrictions in England, could potentially hamper the UK’s move towards economic recovery.

The decline in stock indices has come as Freedom Day raises concerns about whether we may see further lockdowns in the future as the Delta variant continues to spread and worrying variants such as the Lambda variant remain free.

The FTSE stock index has fallen along with many other markets worldwide, with the Dow Jones Industrial Average (DJIA) also falling to 500 points on Wall Street as the United States sees a similar spike in coronavirus cases.

In Europe, the German blue chip companies that make up the DAX Performance Index also traded 2% on Monday, along with the FTSE 100, CAC 40 and Euro Stoxx.

FTSE companies such as Barclays were down more than 4% at 1:44pm, with other major Footsie companies such as International Consolidated Airlines Ltd dropping 9.84 points and 5.86%, ITV Plc down 5.81% and Rolls Royce down 5, 29%.

While there are peaks and troughs to be expected in a market still recovering from the economic devastation caused by the pandemic, this latest drop in the FTSE 100 index has revived concerns about an impending market crash in the future.

Despite the rising number of positive Covid-19 cases in the UK, consumer confidence in UK business and recovery is returning as the speed and pace of vaccination increases across the country.

This positive trend has generally boosted insiders’ hopes for greater economic stability in the UK, but the easing of restrictions and the expectation of even higher daily cases for the country have raised doubts about avoiding further lockdowns in the UK. near future.

Even the most recent turn of events in British politics, in which Prime Minister Boris Johnson and Chancellor Rishi Sunak were forced to self-isolate after the health secretary received a positive coronavirus test, has fueled more fear in the market.

Any sudden turnaround in government coronavirus policies, such as re-imposing lockdowns or tightening restrictions, could potentially slap the UK economy making a stock market crash more likely.

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