FTSE 100 futures rise amid signs lockdown measures being eased

The FTSE 100 futures index has risen to its highest point in weeks amid encouraging news on both sides of the channel of a return to normalcy.

FTSE 100 futures saw some modest gains throughout trading today, buoyed in large part by good news emanating from the European mainland that COVID-19 lockdown measures are set to be gradually eased over the coming weeks and months. FTSE futures were up 1.85% over the course of the day, while the FTSE 100 Index was up a total of 5598.50 points, raising it to its highest level in over seven weeks.

In addition to positive news coming from Europe, the prospects of the UK's largest companies were also lifted by the return of Boris Johnson to work yesterday, following his long battle with the virus, during which he was admitted to intensive care. The FTSE 100 Index is now close to hitting the psychologically important 6000-point mark, something which it last surpassed on March 6, shortly before the UK went into full lockdown mode. Let's take a closer look at the outlook for FTSE futures.

Light at the end of the tunnel gives FTSE futures a boost

Despite a slew of bad news last week that knocked FTSE futures down a few percentage points, things have been on the up since markets opened this morning. Analysts have attributed the upswing to growing signs that the worst of the coronavirus crisis may soon pass in many places, with discussions of lockdown easing measures taking place in several European countries.

As of today, Germany, Austria, Italy and Denmark are taking steps towards reopening schools and businesses in a staggered way, and hopes are that the UK is not far behind. After PM Boris Johnson gave a speech on Monday declaring that the UK had reached a turning point in its return to normality, FTSE shares across the index rallied.

Today, it was announced that a number of restaurant chains in the UK, including Greggs, Nandos, and Burger King, would be reopening more outlets across the country for the drive-thru, pickup, and delivery services - a move that helped to boost business confidence and send FTSE futures up to their highest level in weeks. The trend was reflected across Europe, with DAX, CAC, and Euro Stoxx 50 Futures all rising between 0.2 and 0.6 per cent.

Market hawks remain wary for the week ahead

It's worth noting that the current boost we are seeing in FTSE futures may not prove sustainable. The general future outlook for many companies on the FTSE index remains bleak, with a number of components currently going through one of the worst weeks in living memory.

British oil giant BP is in for a particularly bruising week, with it announcing today that it experienced a record quarterly loss of £3.5 billion as a result of oil demand collapsing around the world and prices briefly falling below $0 a barrel last week. Reports are also emerging that the airline EasyJet is close to going bust, amid rising tensions between shareholders and the company's founder.

Confidence is likely to be further weighed down throughout the week as economic reports on home buying, car sales, and consumer debt are released by the Bank of England in the coming days. All of these developments could erase the recent bounce in FTSE futures, but it is also possible that the current optimism will prevail.

What is weekend trading?

It’s possible to trade the FTSE 100 during Saturday and Sunday with IG. Our world-leading trading platform is the only solution to offer weekend trading on indices. Using CFDs, you can be agile within our weekend markets. Whether it’s breaking news about the coronavirus pandemic – or central bank measures to ease the strain on global markets – you don’t have to wait until the markets open on Monday to trade.

The weekend prices for indices are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions.

How much does it cost to buy UK shares with IG?

There are three ways to ‘buy’ UK shares with IG: spread betting, trading CFDs or buying physical shares. The cost will depend on which method you choose. The table below illustrates how the costs to get exposure to £10,000 of Lloyds stock, which is equivalent to 16,000 shares (quoted at 62.5p a share).

Remember, spread bets and CFDs are derivatives, which come with higher risk and reward than investing.

Cost to get exposure to Lloyds stock

Spread betting CFD trading Share dealing
Action Buy £160 per point Buy 16,000 share CFDs Buy 16,000 shares
Capital required to open £2000 £2000 £10,000
Total fees £20.88 £20.88 £16

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Note: Amounts do not include overnight funding charges and taxes. Spread bets are not subject to tax. CFDs are free from stamp duty, but subject to capital gains tax. Share dealing is subject to both stamp duty and capital gains tax.

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