It’s still early days when it comes to assessing the new B.1.1.529 Covid-19 variant and what impact it could have on the global economic recovery. This hasn’t stopped financial markets selling off, however, as investors enter a new state of panic. As I type the FTSE 100 is down 3% and trading at seven-week lows below 7,100 points. A fresh stock market crash could even be just around the corner.
Clearly many cyclical shares are in danger of sinking if fears over the public health emergency worsen. Travel, aviation and hospitality stocks are just a few that could fall sharply if returning lockdowns appear on the cards. Swathes of others — like energy companies, banks and non-essential retailers — might also suffer strong reversals.
Having said that, there are some FTSE 100 stocks I think could leap if the Covid-19 crisis balloons and the global economy sinks. Here are two blue-chip shares I would buy if stock markets crash again.
A classic FTSE 100 safe haven
Precious metals miner Polymetal International (LSE: POLY) is possibly an obvious stock to buy when investor fears reach fever pitch. Gold is still broadly considered as the ultimate flight-to-safety asset when economic, political and social crises hit. The yellow metal’s rise on Friday morning illustrates this perfectly. It was last trading almost 25 bucks higher on the day above $1,810 per ounce.
Gold’s surge to record highs above $2,000 in summer 2020 helped turbocharge profits at the likes of Polymetal. And it pulled this particular miner’s share price to record peaks. Today Polymetal trades on a P/E ratio of just 7.5 times for 2022, leaving plenty of scope for fresh share price gains. I’d buy the FTSE 100 stock despite the risks that its highly complex operations mean severe, profits-hitting problems (like production outages) could occur at any moment.
One final reason why I like Polymetal International is that at current prices, the mining giant sports a huge 8.4% dividend yield for 2022.
A renewable stock I’d buy if stock markets crash
I’d also consider stocking up on a utilities business like SSE (LSE: SSE) if stock markets crash. These sorts of shares tend to be secure places to park one’s cash when the economy collapses as energy demand remains broadly stable during economic upturns and downturns.
I like SSE in particular as a utility because it focuses on the production of energy from renewable sources. I believe this should make it a great FTSE 100 share to buy for the long term as demand for low-carbon energy is poised to soar. I’d buy the business even though the unreliable nature of green energy production can be catastrophic for profits. Unseasonably calm and dry conditions had a significant impact on power generated at SSE’s wind turbines earlier this year.
At current prices SSE carries a forward dividend yield of 5.4%. This enormous reading reinforces the appeal of this safe-haven stock for me.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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