18th Mar 2022 13:27
(Alliance News) - UK stocks have received more love, while retail investor numbers have increased since the emergence of Covid-19, analysts at Hargreaves Lansdown said on Friday.
The fund supermarket outlined a series of changes in markets and finances since the pandemic began.
UK stocks initially struggled in late February and early March 2020, as markets were roiled by the emergence of the virus.
"Vaccine breakthroughs helped stocks roar back and the trade deal with the European Union gave another positive jolt to the index. It's risen 44% since the darkest day of the pandemic on the financial markets, when the index dropped to 2,837 – its lowest point since June 2012," Hargreaves Lansdown Susannah Streeter commented.
On Friday afternoon in London, the FTSE All-Share Index was down 0.6% at 4,094.27 points. The wider FTSE All-Share benchmark includes the FTSE 100, FTSE 250 and FTSE SmallCap.
Streeter added: "Shaking off the double shackles of Covid and Brexit hasn't been without its setbacks, while new variants have emerged, and extra trade red tape has proved onerous for many importers and exporters. The index has headed higher on a meandering trajectory, with investors overall showing a lot more love for UK stocks."
The road to recovery for the index has also recently been hit by geopolitical tensions. This has been particularly damaging for the travel sector. Shares in British Airways parent International Consolidated Airlines Group SA are down roughly 20% since early February.
Streeter explained: "The romance is still lacking for travel and tourism and companies highly reliant on the sector. The shock of the conflict in Ukraine has caused volatility and fresh disruption for airlines, which had already been struggling against ongoing turbulence on their slow flight path to recovery."
Another trend spurred on by the pandemic was "the rise of the retail investor", HL's Streeter said.
Streeter said: "The number of retail investors on the HL platform has surged during the pandemic, as people were able to build up piles of savings to invest given that many commuting and socialising costs were slashed. This surge in activity was partly prompted by the early pandemic days of stock market turmoil and the euphoria which erupted after vaccine breakthroughs, as between February 2020 and December 2021, there was a 30% increase in the number of active HL clients."
Lockdown accumulated savings are now being eaten into, however, due to rampant inflation.
Streeter said: "In the three months from November to January, after inflation, total pay is up 0.1%, but regular pay is down 1% - inflation over the three months averaged 4.8%. Falling real wages is nothing new, we lived through 12 months of it after the financial crisis. However, falling real wages at a time of rising inflation and enormous pressure on the cost of essentials is going to put huge pressure on those whose finances were already close to the edge."
By Eric Cunha; [email protected]
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