It’s not easy for UK share investors to stay positive in the current climate. Confidence came flowing back into global share markets earlier in November as upbeat news on Covid-19 vaccines broke. But that enthusiasm has slowly petered out as coronavirus cases have continued to grow, the threat of a no-deal Brexit has intensified, and fresh rounds of trade tensions have emerged.
The FTSE 100 and FTSE 250 have both run out of steam after that earlier rally. And it’s possible that UK share markets could reverse again before long, so fragile is investor sentiment today. But let’s consider why we could be on the cusp of a strong and sustained new bull market.
First and foremost, positive news on a Covid-19 vaccine in recent weeks has raised hopes of an economic rebound beginning in 2021. The probability that US President-elect Joe Biden will adopt a less aggressive approach to trade tariffs than his predecessor means that the tension that’s blighted global growth in the past two years won’t reappear.
And there is some flicker of movement in the background that has raised hopes of a Brexit trade deal despite the short time frame. It’s why JP Morgan recently raised its odds on a deal being struck to 80% from its previous two-thirds prediction.
2 UK shares that could soar in 2021
The rally that marked the first days of November could prove in time to have been the start of the new bull market. More positive updates concerning the hunt for a Covid-19 vaccine are expected in the days and weeks ahead. These would naturally solidify the case for a strong economic recovery in 2021 and send UK share prices soaring again.
Let’s say that the early stages of a global economic rebound are just around the corner. What UK shares should Stocks and ISA investors like me consider buying to ride the recovery? Here are two top stocks I think could be great buys for 2021.
Angling Direct is a retailer that doesn’t command a lot of attention on the financial pages. But it’s a UK share I think could soar in value in 2021. Consumer spending on leisure goods is one of the first things to bounce back during an economic recovery. The fact that Angling Direct is a leader in this niche field doesn’t do its profits prospects any harm either. And nor does its online-only model that covers Germany, France and the Netherlands alongside its home territory of the UK.
I also like ITV, even though 2020 has proved to be a nightmare for the broadcaster as advertising revenues dried up. Indeed, a sharp drop in turnover culminated in it being relegated from the FTSE 100 in the summer. But ad spending is also one of the first things to pick up during any economic recovery. Industry experts WARC expect ad spending in Britain to rebound 14.4% in 2021. And the broadcasting colossus — which has already seen an improvement in ad sales in recent months — will be in the box seat to ride any improvement, I feel.