Investors up on hopes of US stimulus

TRADERS were positive on the prospect of more stimulus packages coming from the US congress despite heavy hits to some of the FTSE 100’s biggest names.

The FTSE 100 index closed up 13.35 points, or 0.2%, at 5,879.45 with European markets making similar moves. The French Cac 40 closed up 0.4% and the German Dax 30 ended down 0.2% - the latter hit by a 13% slump in Bayer shares.

Craig Erlam, senior market analyst at Oanda, said: “It’s been a very US-centric week so far and that’s unlikely to change, with stimulus talks continuing and Friday’s jobs report being of great interest.

“It’s the former that’s getting investors excited over the last 24 hours, with the Democrats and Republicans seemingly edging gradually closer to a deal.

“The talks have moved at a snail’s pace and there’s still a significant difference between the packages the two are proposing, but they are heading in the right direction.”

The pound also had a rocky day as the EU said it had started legal proceedings against the UK Government over plans laid out by Downing Street to flout the Withdrawal Agreement and

13 The number of points higher the FTSE 100 finished last night

break international law.

Commission president Ursula von der Leyen said a “letter of formal notification” would be sent to the UK, offering officials a month to respond.

By the close of business, a pound was down 0.32% at 1.288 dollars. Against the euro it was down 0.49% at 1.097 euros.

In company news, the FTSE 100 saw Rolls-Royce shares prop up the biggest fallers on the index, closing down 13.2p at 116.8p.

The jet engine maker said it would need to issue £2 billion in new shares, through a rights issue, a £1 billion bond issue and potentially a further £2 billion in loans.

The new shares were priced at 32p each.

The biggest risers on the FTSE 100 were Melrose up 4.7p at 120.2p; SSE up 46p at 1,254p; DS Smith up 10.3p at 305p; Mondi up 52.5p at 1,692p and Standard Life Aberdeen up 7.2p at 233.2p.

The biggest fallers were Rolls Royce down 13.2p at 116.8p; DCC down 398p at 5,610p; Royal Dutch Shell A down 35.9p at 928p; Royal Dutch Shell B down 32.9p at 907.3p and BP down 7p at 218.2p.