US stimulus package helps FTSE end week on high
A MASSIVE stimulus package in the US excited markets yesterday as the trading week ended on a high.
The FTSE 100 closed up 164.93 points to 5842.66.
The US Federal Reserve announced a new 2.3 trillion dollar (£1.9 billion) programme to support businesses, backing loans to those with fewer than
10,000 workers.
It came after the UK Government announced it would be able to tap into its overdraft with the
Bank of England earlier yesterday.
“All of this extra stimulus has helped overshadow the fact that there is little likelihood in the short term that the current lockdown measures will be lifted,” said Michael Hewson, an analyst at CMC Markets.
It also overshadowed another nightmare week for the US jobs market.
Another 6.6 million Americans added their names to the weekly jobless claims this week, against expectations of around five million.
Just three weeks ago, 3.3 million people joined the system, a figure which was then far above previous records.
It means that almost 17 million Americans have lost their jobs in recent weeks.
Both main US indexes, the S&P 500 and the Dow Jones, were trading up by around 1.9 per cent after markets closed in the UK.
The Dax in Germany ended the day up 2.2%, while Paris-based index Cac 40 gained 1.4%.
The pound lost 0.1% against its rival on the continent, with a pound now costing 1.1394 euros. A pound will now put
Americans back by 1.2448 dollars, a 0.5% rise in the value of sterling.
In company news, easyjet gained 5.5% as it deferred the purchase of 24 Airbus aircraft following pressure from founder Sir Stelios Haji-ioannou.
The airline announced that the measure will be implemented over the three financial years up to 2022.
Greggs said it will be able to get £150 million from the Treasury and the Bank of England after closing its stores across the country, setting it up to survive the year even if bakeries cannot reopen.
Shares dropped 3.1%. Diageo shares gained 4.4% on the news that the speed of the shutdown has hit its business harder than ever before.
The company scrapped advertising for many brands and put its share buyback scheme on hold.
The biggest risers on the FTSE 100 were Just Eat Takeaway, up 926p to 7,558p, Next, up 407p to 4,624p, Carnival, up 81p to 965.6p, Fresnillo, up 58p to 714.4p, and ITV, up 6.08p to 76.38p.
The biggest fallers on the FTSE 100 were IAG, down 3.1p to 246.7p, Antofagasta, down 9.2p to 762.2p, Aveva, down 27p to 3,589p, Auto Trader, down 2.7p to 414p, and Rentokil Initial, down 0.9p to 392.3p .