Author of the article:

Reuters

Reuters

Shivani Kumaresan

Publishing date:

Feb 23, 2021  •  3 hours ago  •  1 minute read

London’s FTSE 100 was subdued on Tuesday as a sharp rise in the unemployment rate to 2016-highs overshadowed gains in energy and travel-related stocks, while HSBC dropped after the lender abandoned its long-term profitability targets.

The commodity-heavy FTSE 100 was flat by 0921 GMT, as Britain’s jobless rate rose to 5.1% in the last three months of 2020.

The mid-cap FTSE 250, however, gained 0.9%, boosted by a 2.4% jump in travel and leisure stocks, a day after Prime Minister Boris Johnson unveiled a map out of the lockdown for England, although the plan would keep some businesses shuttered until the summer.

“We might have a roadmap out of lockdown, but unemployment is still heading in the wrong direction and things will get worse before they get better,” said Laith Khalaf, a financial analyst at AJ Bell.

“A cautious release from social restrictions may forestall a future lockdown, but it also serves to dampen economic activity and put jobs under pressure.”

A raft of global stimulus has helped the FTSE 100 recover about 35% from a coronavirus-driven crash last year, but it has lagged its European peer on worries about the economic damage from prolonged lockdowns. More recently, fears of rising inflation have hit equities worldwide.

Higher commodity prices boosted shares of BP and Royal Dutch Shell by 2.4% and 0.8%, respectively.

HSBC Holdings Plc fell 1.1% after unveiling a revised strategy, focused mainly on wealth management in Asia as the COVID-19 crisis pushed the lender’s annual profit sharply lower.

Shares of Holiday Inn-owner InterContinental Hotels rose 3.4% on optimism over Britain’s lockdown exit plan, despite posting an annual loss triggered by repeated COVID-19 restrictions and lockdowns. (Reporting by Shivani Kumaresan in Bengaluru, Editing by Sherry Jacob-Phillips and Rashmi Aich)

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