BETTER than expected US data helped to stabilise markets yesterday as investors’ fears over the Federal Reserve scaling back its stimulus measures were eclipsed by hopes of a recovery in the world’s largest economy.
Retail sales increased by 0.6 per cent in May from April, the Commerce Department said. Analysts had forecast just a 0.4 per cent increase.
Separate data from the US Labor Department showed initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 334,000 last week – lower than expected.
The data helped the FTSE 100 close 0.08 per cent higher at 6,304.63, a sharp turnaround from its one per cent fall at the open. The US followed suit, with the Dow Jones closing up 1.2 per cent and the S&P 500 adding 1.5 per cent.
Markets worldwide had been hit by a 6.35 per cent plunge in Japan’s Nikkei overnight – meaning it has now dropped 20 per cent from its peak and putting it into bear market territory.