FTSE 100 and sterling bounce back

The FTSE 100 rebounded after another volatile day finished with improving sentiment as the Bank of England announced another rate cut.

The central bank cut interest rates to 0.1% from 0.25% and increased its holding of UK government and corporate bonds by £200 billion in a bid to shore up the economy following the coronavirus outbreak.

Markets were also buoyed by the European Central Bank’s (ECB) stimulus deal, which saw Christine Lagarde announce a £687bn economic package for the Eurozone.

The FTSE 100 closed 71.03 points higher at 5,151.61 at the end of trading yesterday.

Connor Campbell, financial analyst at Spreadex, said: “In one of the comparatively more stable sessions we’ve seen of late, a double-hit of ECB and Bank of England stimulus produced something calm-adjacent on Thursday.

“The main beneficiary of this was the pound – which, to be clear, was in desperate need of this temporary escape rope. The pound’s surge limited the FTSE’s own rebound.”

Sterling was jolted into a slight recovery from Wednesday’s dreadful session.

The value of the pound rose 0.75% versus the US dollar at 1.167 and was up 2.86% against the euro at 1.091.

Europe’s major markets were bolstered after the ECB stepped up with its latest package.

The German Dax increased by 2%, while the French Cac moved 2.68% higher.

Across the Atlantic, the Dow Jones made slight progress after its major fall on Wednesday, edging higher after the bell.