Investing.com - The UK stock market reaps the fruits of public vaccination policy after the Prime Minister Boris Johnson became the first leader in Europe, which makes a clear chart of returning to normal life after the second winter of quarantine.
On Tuesday, the FTSE 250 index, focused on the UK, was the best in Europe, rising almost 1% by the middle of the morning on the Exchange in London due to the strong growth of all types of shares that can win from re-opening stores and return workers to their offices. Meanwhile, the FTSE 100 index showed the best results on larger platforms, since the steady increase in the shares of mining and commodity companies limited its loss to 0.2%.
But, most European indexes were traded noticeably lower, since growing rumors about the return of inflation prompted investors to abandon the shares that were the main winners during the pandemic period. The German DAX technical index fell by 2.9%, while the Danish OMX Copenhagen 20 also fell by more than 2%, since cash flows began outflow from companies such as Vestas Wind Systems A / S (CSE: VWS) and Jeweler Pandora (CSE: PNDora).
The main reason for this step was the television of Boris Johnson on Monday evening, in which he promised "careful and irreversible" way out of quarantine regime in four stages. His goal is to remove all the significant restrictions on social and business life by early July.
The world audience may wonder whether people will kill the words of a person who have already worn out of the obvious lies already countlessly - mostly, although not exclusively about Brexit, - for the investment of real money to the markets (except as the reverse indicator). However, this time the facts on the side of Johnson: for the first time this year, the number of deaths from COVID-19 on average is less than 500 per day, while the number of new infections has decreased by about 80% compared with the peak in January. Almost 18 million people have already received their first dose of vaccine: it is more than one third of the adult population. At the same time, fresh data published on the weekend provided a tangible evidence that the decision to increase the time between the two necessary injections also slowed the transmission of the disease and weakened the pressure on the already overloaded hospital system. After a year, sometimes screaming failures in the management of the crisis London seemed to have found a recipe for success.
The re-opening of enterprises is even more important for the UK economy than for many others, given the intensity of the services sector in its GDP. Blow on the service sector is one of the reasons that the GDP of Great Britain has declined more sharply than, let's say, German GDP last year. When the European economy returns to the average, such numbers will be flattered by the United Kingdom.
In the near future, such shares will bring more confidence than shares depending on the revival of international travel and tourism. EasyJet (Lon: EZJ) increased markedly by 10% after reported that the number of ticket bookings after Johnson's speech increased by 300%, but this is a very low base, as international tourism requires cooperation with other countries, mainly in Europe, Whose graphs of the resumption of work are strongly in fact behind the charts in the UK. This causes serious doubts how much of their enterprises will open by the summer.
Author Jeffrey Smith
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