How the Vaccine Rollout Brought Joy to the FTSE 100

Have you been vaccinated yet? As a frequent traveller and investor, I am happy to learn about how the vaccine rollout brought joy to the FTSE 100. We’ve all thought about the impact the pandemic has had in our personal lives, some have lost people and in the industries we work, some have lost jobs. But I bet not many have thought about the impact of the pandemic on the stock market except maybe for the investors and traders. As a beginner investor I am not too concerned about the short term happenings in the market so I have not been emotionally swayed by the fluctuations we have been seeing of late.

At the height of the pandemic last year, most of us where focused on ‘how long will this last for’ and only a few took the opportunity to invest in the stock market as the share prices dropped. As a traveller, I was concerned about when I would next be able to travel again, as an investor I took it as an opportunity to invest more, as an employee I wondered how it would affect the industry I work in. We all had different concerns and it is easy to see why the vaccine rollout brought joy to the FTSE 100 as the is seeing a shift in investors whilst most still remain cautious.

Disclosure: This is a collaborative post

How the Vaccine Rollout Brought Joy to the FTSE 100

So, what is the FTSE 100 (pronounced footsie 100)? The FTSE 100 stands for The Financial Times Stock Exchange which contains 100 of the largest public listed companies with the highest capitalisation that trade on the London Stock Exchange. Obviously, the pandemic made many investors across the global nervous about the impact it would have on the stock market and regular investors saw a dip in their investments but the market started to slowly bounce back. The vaccine rollout has brought joy to the FTSE 100 companies because there is light at the end of the tunnel and investors will slowly but surely start investing again in the stock market.

The rollout of the various coronavirus vaccines in the UK was always described as a “game-changer” in relation to the pandemic, and its relative success is definitely having a positive impact on the nation’s markets.

To date, more than 35 million people have had their first vaccine dose in the UK, while more than 51 million jabs have now been administered nationwide.

At the same time, the daily death and infection rates in the UK continue to dwindle, creating hope that the recent, tentative economic recovery could be sustained over time. But how exactly has the vaccine impacted on the FTSE 100, and what does the future hold in store for the UK’s blue-chip index?

Vaccines, Growth and the FTSE – The Story so Far

Interestingly, both the UK and US have fared increasingly well against the backdrop of a successful vaccine rollout, with the FTSE 100 closing 103 points (or 1.72%) higher at 6,154 at the close of trading on Tuesday.

Make no mistake; this was inspired by the vaccine rollouts on both sides of the Atlantic, with Wall Street’s gains also soaring as President Joe Biden pledged to administer 200 million vaccine doses within his first 100 days in office.

More specifically, the blue-chip S&P 500 index added around 15 points to reach 3,376 during the same period, while the Dow Jones Industrial Average climbed to 28,055 (and increase of 264 points).

With the FTSE 250 also closing in on record highs, there’s no doubt that successful vaccination programs in the UK and the US are continuing to underpin financial market growth and creating an underlying sense of optimism.

Of course, vaccine rollout is also helping the UK to unlock its economy and move towards being completely reopened on June 21st. For example, while the economy actually contracted by 1.5% overall during Q1 of 2021, improved retail performance and the reopening of schools underpinned growth of 2.1% in March alone.

What’s more, the longer-term outlook for economic growth in the UK continues to be revised upwards. Most recently, EY ITEM Club’s Spring Forecast forecasts growth of 6.8% through 2021, up from the 5.0% initially predicted back in January. 

The Last Word – Can These Trends be Sustained?

These figures all add up to a growing sense of optimism and positive sentiment in the UK marketplace, and there’s no doubt that the second and third quarters could be lucrative on these shores.

However, some uncertainty remains amongst investors, with UK forex broker services likely to see increasingly risk-averse movements in the near-term. It’s certainly true that some sectors in the UK will open at a slower pace than others, while the threat of vaccine-resistant coronavirus strains coming from overseas is also omni-present.

These factors will definitely weigh on the minds of investors, encouraging them to approach the marketplace with caution as 2021 continues to unfold.

Disclaimer: I am not a financial advisor, please seek financial advise for your personal situation.