Germany’s R number ratchets higher as second-wave fears breeds angstOn June 22, 2020 by Thomas Belayneh
The FTSE 100 closed 0.76% down today, as news emerged over the weekend that Germany’s R number had surged from 1.79 to 2.88 renewed fears over a second wave of Covid-19 infections.
Statistical uncertainty means the actual reading (as per the 95% confidence intervals) could be as high as 3.73.
In light of the praise lauded on the country’s quick response and widespread testing, this development is of wide concern to European leaders who may have to contend with a second wave of infections in their respective countries. The abattoir outbreak at a Tönnies meat-processing facility has proliferated into over one-thousand positive tests for coronavirus.
In another concerning development, a tower block in the German city of Göttingen had been fenced off and placed under strict quarantine as 102 residents tested positive for the virus. Police have confirmed scuffles with 200 residents at the tower block who tried to escape quarantine.
It was no surprise then that the biggest faller on the FTSE 100 was the British-American cruise operator, Carnival (Ticker: CCL), as news broke that the world’s largest cruise line operator with over 100 vessels extended its suspension of all trips until the end of September.
This was longer than the 1st August restart of some trips that the company had hoped for just weeks earlier. News of record-breaking one-day Covid-19 cases rises in US states like Florida and South Carolina over the weekend has of course additionally dampened investor sentiment towards the stock.
Carnival’s share price was the worst affected on the benchmark, falling by almost 80% in just under a month from 20th February to 18th March wiping approximately £12bn of value out of its market capitalisation. On the other hand, market participants witnessed the return of the defensive trade with grocery giants Sainsbury’s, Tesco’s and Ocado bucking the trend and rising 3.15%, 2.51% and 4.33% respectively.
In fact, Ocado group (Ticker: OCDO) was the best performer on the index, as investors continued to bet that its innovative and automated ordering and delivery technology is more favourable than its peers in the social distancing environment prevalent in today’s world.
This site uses Akismet to reduce spam. Learn how your comment data is processed.