Over the past three years, the United Kingdom’s stock market has experienced significant volatility. In February 2020, stocks were performing well, and there was optimism that the country’s economy would continue to grow. Then in March, fears over the coronavirus pandemic sent markets crashing as investors rushed to sell their assets. The economic impact of COVID-19 took its toll on almost every sector, resulting in some of the worst trading conditions since 2008.
However, despite this tumultuous history, the UK’s stock market has been resilient and is beginning to show signs of recovery. This article will discuss the current state of the UK’s stock market and explain why it has remained relatively stable.
The latest performance of the UK’s stock market
Since the start of 2021, trading activity on the London Stock Exchange (LSE) has increased steadily. The FTSE 100 index peaked at 7,637 in mid-February and is currently hovering around its all-time high. It suggests that investor confidence is slowly returning, and the market is slowly regaining footing.
The FTSE 250, which tracks mid-cap companies, has also seen increased activity since the start of 2021. This index currently stands at 23,735 points, a slight decrease from its peak in mid-February but still up significantly from its low point in April 2020.
The FTSE Small Cap index, which includes the smallest companies listed on the LSE, has also seen strong growth since early 2021. This index is currently at an all-time high of 4,497 points and shows no signs of slowing down.
What is driving the stock market’s performance?
Despite the challenging economic conditions brought about by the coronavirus pandemic, investors remain optimistic about the future of the UK’s stock market. Several factors fuel this optimism.
Positive economic data
Recent reports suggest that the UK economy is recovering faster than expected and could return to pre-pandemic levels within two years. Investors are taking this as a sign that the country is on track for economic growth and is investing in stocks to take advantage of this potential.
Central bank stimulus
The Bank of England has taken several measures to support the economy, including reducing interest rates and expanding its asset purchasing program. It has injected liquidity into the stock market and given investors confidence that the market will continue to grow.
Brexit deal
The UK and EU have recently agreed on a post-Brexit trade deal, which has alleviated some of the uncertainty surrounding the future of the country’s economy. This news has been welcomed by investors, who are now more confident about investing in UK stocks.
How to trade stocks like a pro
Investing in stocks can be a daunting prospect for novice investors. But with the proper guidance, anyone can buy and sell stocks like an expert. Knowing how to buy stocks online in the UK is essential for success, as it provides access to diverse markets and allows you to take advantage of different trading strategies.
Research the company
Before investing in a particular stock, it is essential to research the company. It includes looking at its financials, reading analyst reports and keeping updated with news about the company.
Analyse the stock’s performance
It is also essential to analyse the stock’s recent performance. It can be done by looking at graphs and reading news about the stock’s performance. It will help you determine whether it is a good time to invest in the stock or wait for more favourable conditions.
Choose your entry and exit points
Once you have determined that the stock is a good investment, choosing your entry and exit points is essential. It involves deciding when to buy and sell the stock and determining how much you are willing to risk on each trade.
Monitor your investments
It is crucial to monitor your investments and make adjustments as necessary. It includes keeping track of news about the company, analysing the stock’s performance and ensuring that you are up to date with any changes in the market.
