UK share markets have got off to a solid-if-unspectacular start in December. The FTSE 100 came within a whisker of hitting its highest since early June yesterday. It’s edging higher again in Wednesday trade and was last trading around the 6,400-point marker.
It’s very possible that UK share prices will rally strongly again in December. And here are a few reasons why the FTSE 100 could surge to 7,000 points (or above) by Christmas:
- More encouraging news on a Covid-19 vaccine. Today the UK became the first country to approve a formula for widespread rollout with first vaccinations set for next week. More countries are expected to follow soon in the global fightback against the pandemic.
- Positive developments on fraught Brexit trade talks. Negotiators have just entered ‘the tunnel’ stage, during which the final points are said to be hammered out. It’s possible that the endgame is in sight.
- Fresh suggestions of more interest rate cuts and quantitative easing measures by central banks. Bank of England policymakers continue to flirt with the idea of cutting rates below current record lows. Other major institutions like the Federal Reserve are expected to print more money in 2021 should the economic recovery veer off course too.
I’d buy these 3 UK shares for the bull market
The jury is out on whether the FTSE 100 and UK share prices generally will soar by the festive period. Disappointing news on Covid-19 — whether that be on vaccines or global infection rates — could send stocks barrelling lower again. A collapse in Brexit trade talks would also deal a devastating blow to investor confidence.
It doesn’t matter to me whether or not UK share prices sink or soar in the near term. I know that British stock markets will recover and recover strongly after the battering they’ve taken in 2020. The question is ‘when’ rather than ‘if’, as history has shown us time and again. And as someone who invests for the long term, I’m happy to sit back and wait.
I recently bought shares in FTSE 100 colossus Coca-Cola HBC for the new bull market, whenever that might kick off. I’m confident it’ll rocket in value as the economic recovery bolsters consumer spending power. There are plenty of other cyclical UK shares I’m thinking of buying in my Stocks and Shares ISA too.
Low-cost European airline Wizz Air, for example, is on my radar. This share has significant balance sheet strength to weather any setbacks in the fight against Covid-19. And it will see ticket sales rocket when travel restrictions are lifted. I’m also thinking of buying shares in FTSE 250 fast-moving consumer goods (or FMCG) play PZ Cussons. Sales of its household goods and personal care products will also receive a boost as shopper appetite increases. And what’s more, its excellent exposure to the emerging markets of Africa and Asia will deliver brilliant profits growth further out.