The ECB, faced with weak economic data and low inflation, cut interest rates in the Eurozone – Britain’s top trading partner – in a move that pushed down bond yields and offered fresh support to stimulus-hungry equity markets.
“We will be leaning on monetary support from the central banks more and more, I suspect, as we continue through the year,” said Paul Kavanagh, chairman of Killik Capital.
“Bond yields are hitting new lows and it’s all telling you at the moment that this is not a (stimulus) programme that will end shortly ... I recommend adding to equity exposure at this level, I can see it surprising to the upside.”
Yusuf Heusen, sales trader at IG Group, said: “Only time will tell whether the optimism generated by expectations of an easing-in policy will last.”
The FTSE 100 closed up 9.42 points, or 0.2 per cent, at 6,460.71 points, its highest close in a month.
Stronger than expected US weekly jobs data – which raised the likelihood of a firm reading from Friday’s keenly watched non-farm payrolls report – also helped the British blue chips higher, as did some upbeat results.