BRITAIN’S FTSE 100 posted its highest close in a month yesterday, supported by the European Central Bank (ECB) delivering some widely expected stimulus and by reassuring earnings numbers from the energy sector.
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.