Weekly Digest: FTSE sinks, pound wobbles

Global markets shaken by fears over Delta variant.

· 2 min read
Markets Digest
Markets Digest
  • FTSE drops 100 points
  • UK pound drops to new monthly lows
  • easyJet revenues increase
  • Clayton Dubilier & Rice to re-enter bidding race for Morrisons
  • UK government to offload more Natwest shares
  • Global markets bounce back

It was a turbulent start to the week as a wave of risk-off sentiment took hold of global markets over increased concerns that the rise in Covid-19 Delta infections could threaten the global economic recovery.

The FTSE 100 fell by 100 points in early trading Monday while the British Pound depreciated against most G10 currencies. Against the U.S Dollar, the pound hit a new two-month low touching $1.3570 Tuesday morning before paring some losses.

The global number of new coronavirus cases grew by at least 12% over the past week, with almost all regions reporting a rise in infection. These numbers will certainly dish out more punishment to equity markets as investors seek refuge in safe-haven assets. Caution is expected to remain.

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easyJet revenues jump in Q3

easyJet (LON:EZJ) said on Tuesday that its revenue for the third quarter of its financial year amounted to £212.9 million, surging 2,866% from £7.2 million achieved in 2020 at the height of the COVID-19 pandemic.

Clayton Dubilier & Rice considering new offer for Morrisons

American private equity group Clayton Dubilier & Rice is reportedly working on putting forward a second takeover bid for Morrisons (LON: MRW).

The firm will be lining up a financing package for an offer with JP Morgan, Goldman Sachs and BNP Paribas.

Last month, the supermarket came into play after refusing a £5.5bn takeover bid by Clayton Dubilier & Rice, saying that the offer was "far too low".

Clayton Dubilier & Rice has until mid-August to come back with a higher offer.

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UK government to offload more Natwest shares

The UK Treasury has unveiled plans to cut its majority holding in Natwest further.

The government still owns a majority share of NatWest after it bailed out the lender in 2008 to prevent the collapse of the banking system.

The Treasury said yesterday morning it has instructed appointed broker Morgan Stanley to sell NatWest shares on its behalf over the next 12 months, starting this August.

The UK paid an average of 502p per share when it rescued the bank. Natwest shares today are in the region of 200p and chances of recouping the cost of the bailout remains highly unlikely.

Global markets bounce back

Stock markets in Europe and the US have pushed higher towards the end of the week, as the recovery from Monday’s sell-off continues. The Australian market closed at a record high.

The British Pound has made an impressive recovery and is now back above $1.3700. The FTSE 100 has also clawed higher finishing the week above 7,000 points.