The news that Joe Biden’s $1.9 trillion stimulus bill had passed through Congress over the weekend helped give investors confidence, pushing markets up round the world.
The bill will now move to the Senate, where the Democrats hold the casting vote.
The S&P 500 rose 2.5 per cent and the Nasdaq jumped 2.9 per cent as bond markets calmed after a monthlong sell-off. Encouraing US vaccine data has also strengthened bets of a strong economic recovery.
Johnson & Johnson rose pne per cent as it began shipping its single-dose vaccine, the third to be authorised in the US.
All major S&P sectors were up, with those expected to benefit most from an economic rebound outperforming the rest of the market. Financials, energy and materials gained between two and three per cent.
London’s premier index was up 1.6 per cent at 6,588.53 points by market close, having shed 2.5 per cent during February’s final session.
The FTSE 100 climbed higher today as the market looked to bounce back from Friday’s dire session.
The FTSE 250 got off to an even faster start to the week, picking up 1.49 per cent to rise to 21,221 points.
On the FTSE 100 BA owner IAG led the way, picking up another 6.9 per cent to continue its impressive recent rally.
Only a little further back were the UK’s housebuilding giants Persimmon, Taylor Wimpey, and Barratt, which all rose between 4.9-5.5 per cent.
Ahead of Wednesday’s Budget, Chancellor Rishi Sunak has announced a new guarantee scheme for 95 per cent mortgages, which could be behind the rally.
Friday’s tumble, which came as global bond yields hit their highest levels for over a year, prompting a sell-off of equities, took the gloss of what otherwise was a strong month for the market.
Analysts will be watching keenly to see if yields are pushed even higher by continued selling, as Hussein Sayed, chief market strategist at FXTM, said:
“Now, the question becomes will investors keep selling government debt and send yields even higher, or will they align with the guidance of central banks. This is going to be critical for the next move in global stock markets.”
Other European markets, which were also dented by the sell-off, rose today, with the French CAC up 1.5 per cent and the DAX up 1.6 per cent.
Richard Hunter, head of markets at Interactive Investor, said: “The FTSE 100 is seeing a relief rally following a poor end to last week.
“The increase in the oil price is a factor, and as an index increasingly being seen as providing value, international investors may be tempted to buy into any strength. The index remains ahead by 2.0 per cent in the year to date, with the state of the nation likely to be revealed later in the week when the terms of the Budget are revealed.”