FTSE halts spiral on reassurances from BoE and PBOC, but certainly not home and dry

The FTSE 100 closed up 1.1 per cent at 6096 at the end of the day’s trading, with the Bank of England governor Sir Mervyn King reassuring investors that the unwinding of asset purchases is some way off and will be carried out at a slow pace, and the Chinese central bank saying it will use short-term liquidity operations and standing lending-facility tools to ensure the stability of markets.

However, it’s still down around four per cent in seven days and seven per cent from the start of the month. To reach the Hedgeye three-month trend line of support, it would have had to close at 6,396. One FX trader was a little more lenient before the close.

Other European markets finished up, with the German Dax up 1.5 per cent, the French CAC up 1.6 per cent and the Spanish IBEX marginally up 0.3 per cent (following a very worrying drop yesterday). The Italian MIB was slightly down by 0.4 per cent.