Markets in Europe gain momentum
Markets in Europe lifted after a positive afternoon session as trading sentiment strengthened in the face of stark warnings over a potential second wave.
The FTSE 100 increased later in the session, despite the US reporting its largest one-day increase in coronavirus infections since late April and the World Health Organisation warning of a possible surge in post-lockdown infections in Europe.
London’s top flight closed 23.45 points higher at 6,147.14. Connor Campbell, financial analyst at Spreadex, said: “Against the odds, the markets swung positive on Thursday afternoon, as they attempted to claw back some of Wednesday’s heavy losses.
“It seems that investors aren’t yet ready to heed the IMF’S advice about the gulf between the recent market rally – which has taken its knocks of late, but still leaves indices well above their end of March lows – and the realities of a global recession.”
The French and German markets saw particularly strong rallies, ahead of their UK counterparts, in a significant U-turn after a negative start to trading.
Across the Atlantic, the Dow Jones opened lower due to a worse-than-forecast jobless claims reading, which came in at 1.48 million against the 1.32 million forecast. However, it quickly returned to positive territory.
Meanwhile, sterling was mixed after former Bank of England governor Mervyn King cautioned that the global economy could be facing a coronavirus debt time bomb.
The value of the pound fell 0.11 per cent versus the US dollar at $1.240 and was up 0.17 per cent against the euro at €1.105.
Finance firms performed particularly strongly through the session, while a number of leisure stocks slipped amid caution before reopenings next month.
Royal Mail tumbled after it revealed plans to axe around 2,000 management jobs in a bid to deliver lower costs in the face of the coronavirus crisis. Shares closed down 22.35p at 157.5p.
Easyjet’s stock lost altitude – closing down 70p at 670p – despite revealing plans to relaunch hundreds of flight from 1 July. The budget airline also raised £419 million from investors to bolster its finances in the face of the pandemic.