European markets rally as US stimulus hopes drive rebound
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The European stock markets rallied yesterday as intervention from the US central bank finally helped to boost global sentiment.
The FTSE 100 closed 143.82 points higher at 5,294.9 at the end of trading yesterday.
Despite spending a significant part of the morning session in the red, London’s top flight jumped after the Federal Reserve said it would be launching a Commercial Paper Funding Facility.
The move, which will allow it to buy up short-term debt issued by struggling companies seeking to raise cash, was warmly received by the equity markets following dire trading on Monday.
It came amid caution from UK businesses and investors ahead of
Avon Rbbr ..................................... £20 3/4 BAE Systems ................................. 482 7/8 Chemring ....................................... 170 Meggitt ........................................... 315 3/4 Rolls-Royce .................................... 388 1/2 Senior ................................................ 86 3/8 +1/4 -14 1/8 -16 3/4 -66 3/4 -41 1/2 -12 7/8
Rishi Sunak’s pledge to provide financial support to firms set to be impacted by coronavirus.
David Madden, market analyst at CMC Markets UK, said: “European stocks are set to close higher on the session amid the major volatility caused by the coronavirus crisis.
“European leaders are in focus as they have been carrying out a conference call in relation to the crisis, and traders are hopeful for a robust response to the health emergency.”
The major European markets all jumped into life at the end of the session, with the main German and French indices surging from negative positions at midday.
The German Dax increased by
Aberdeen Diversified Income & Growth Trust ................................................... 85 5/8 -6 3/8 Alliance Trust ................................ 582 -37 Dunedin Inv .................................. 206 -10 Edin Invst ....................................... 395 -14 1/2 Electra Private Equity ................ 272 +10 F&C Investment Trust ................ 495 -61 Henderson Smllr Cos ................. 584 -65 North American Inc ................... 210
Scot Am .......................................... 312 Scottish Mortgage ..................... 506 Witan ............................................... 149 1/4
-9 -5 1/2 -5 1/4 2.25%, while the French Cac moved 2.84% higher.
US traders were particularly optimistic as the policy sent the Dow Jones and S&P 500 immediately higher when the markets opened.
Meanwhile, sterling dived after the resilient dollar was boosted by the announcement.
The value of the pound fell 1.69% versus the US dollar at 1.206 and was up 0.16% against the euro at 1.099.
In company news, leisure firms dominated the bottom rungs of the FTSE after they were hammered by the Government’s announcement to ask people to avoid pubs, restaurants and theatres in response to the coronavirus outbreak.
Retailer Laura Ashley had its shares suspended after it announced it had filed for administration after the virus thwarted talks over a rescue package.
The fashion and furnishing specialist
Ashley L ............................................... 0 Dixons Carphone .......................... 69 1/4 Inchcape ........................................ 436 Kingfisher ...................................... 124 M & S ................................................. 92 3/8 Mothercare ........................................ 9 3/4 Next ................................................. £42 3/4 WH Smith ...................................... 905 1/2
-1 +6 3/4 -44 3/8 -13 -4 5/8
+1 1/4 -127 1/2
Anglo American ....................... 1299 5/8 Antofagasta .................................. 720 1/4 BHP Group ................................. 1124 5/8 3/8
Fresnillo .......................................... 584 3/4 Kaz Minerals ................................. 333 3/8 3/8
Rio Tinto ......................................... £33 7/8 said its largest shareholder Mui Asia was unable to support the retailer with “financial support in the required timeframe”.
Fellow retail group Dixons Carphone saw its shares pick up after it announced plans to shut all 531 of its standalone Carphone Warehouse mobile phone stores in the UK.
The group said the shops will shut on April 3 as it plans to sell mobile phones solely in its 305 combined Currys PC World stores and online across the UK. Shares jumped 6.74p to 69.2p.
Elsewhere, British Gas owner Centrica slipped lower after two of the firm’s bosses stepped down, leaving their successors to deal with the volatility caused by coronavirus.
Chief executive Iain Conn and
+9 5/8 +99 5/8 +83
+57 3/4 +44
+3/8
Bunzl ............................................ 1396 1/2 Capita ................................................ 33 1/4 Connect Group .............................. 13 3/4 De La Rue ......................................... 56 Elctro Com ..................................... 471 1/4 Electrocomp ................................. 471 1/4 Experian ......................................... £20 5/8 G4S ..................................................... 92 1/4 Hays ................................................. 121 Homeserve .................................... 842 1/2 Menzies J ....................................... 105 Redde Northgate ........................ 250 Rentokil .......................................... 400 5/8 Travis & P ........................................ 800 1/4
-130 +5 1/4 -2 1/8 -16 1/4 +21 5/8 +21 5/8
-5 1/8 +11 3/4 -45 1/2 -9 5/8
+1 7/8 -102 3/8 chairman Charles Berry both resigned from the energy provider with immediate effect. Shares in the business fell 3.06p to 39.28p.
The price of oil rebounded slightly in the wake of Monday’s steep decline but still moved into the red following a volatile trading session.
The price of a barrel of Brent crude oil decreased 1.27% to $29.4.
The biggest risers on the FTSE 100 were Antofagasta, up 99.6p at 720.2p, Just Eat, up 625p at 6,560p, Ocado, up 128p at 1,361p, and Admiral Group, up 205p at 2,232p.
The biggest fallers of the day were JD Sports, down 74.9p at 342.3p, Meggitt, down 66.7p at 315.8p, Carnival, down 177.4p at 942.6p, and ITV, down 9.46p at 65.38p.