Sectors most affected by the Covid pandemic and the outlook


It is a tricky time for investors at the moment to say the least. After one of the longest bull markets in history, the pandemic crisis caused huge disruption with sweeping share movements affecting individual stocks and sectors alike.

There were some significant losers, including a swathe of high street closures, but also some dramatic gainers as the impact of Covic shook all parts of the marketplace and workforce.

The biggest risers

In terms of the biggest risers, let's look at the data from the FTSE-All Share from January to March 2020 as the first lockdown kicked in.

Suppliers of the basic commodities and services fared best in the markets as society slipped down Maslow's Hierarchy of Needs towards the essentials. The world retreated inwards and once the supply chain could be secured the market reacted accordingly.

Top of the sectors according to the IFS (Institute for Fiscal Studies) were the Food & Drink retailers, followed by Personal Goods, Medicines, Gas & Water and Mobile Telecommunications. 

The biggest fallers

Again, when we look at the fallers during the first lockdown, the sectors most affected are logical. Fossil Fuels & Distribution topped the list of FTSE-All Share fallers, with Tourism & Leisure, Automative & Parts, Fossil Fuel Producers and Insurance most affected.

Logical as people travel less which uses less fuel and we see an associated rise in insurance claims and risk calculations from the pandemic

What's next?

Given the disruption we've seen, it's a brave investor that tries to second guess the market at the moment. 

We could at least assume that those sectors most affected were likely to rebound back towards their old levels provided they could stay afloat in the meantime. And indeed, those sectors who most benefited from the move indoors were likely to dip again, but perhaps not back to previous levels as society reset with working from home and more local tourism remaining for the medium term at least. 

And likewise the pharmaceutical firms with the most effective and best distributed vaccines had strong prospects for the future even if some of them were initially working at cost. 

Once some of the emotion has retreated from the market, which is likely to remain twitchy throughout 2021, then again we have to look at fundamentals, growth prospect and longer term trends, while being conscious that mutations in the virus may cause further bumps along the road.

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