Bank shares lifted the FTSE 100 today as investors continue to boost economy-linked sectors in hopes of a smooth recovery from the pandemic, but the global bond sell-off continued to dent Wall Street.
London’s blue-chip index rose 1.34 per cent to 6,719 points by the closing bell.
The more domestically-focused FTSE 250 also rose by 1.19 per cent to 21,210 points by the end of trading.
Aero engines maker Rolls-Royce rose by 7.3 per cent today as the EU and the United States agreed on Friday to suspend tarrifs on billions of dolalrs of imports in a dispute over aircraft subsidies which has been ongoing for 16 years.
Neil Wilson, chief market analyst at Markets.com, said: “The reflationary trade is being more supportive of European stocks in general because they’re not as weighted towards growth and tech that the US is.
You’ve got some progress on trade with between Europe and the U.S. and that’s good for some of the companies like Rolls-Royce.”
Pearson, the UK education group, jumped 6.4 per cent as its new boss outlined his plans to expand beyond schools and colleges with a strategy to help workers to learn new skills and retrain.
The London Stock Exchange company continued its slide from Friday, falling another 6.7 per cent today, as it forecasted higher costs for intergrating data anylstics comapny Refentive which the LSE acquired for $27bn in January.
Bank stocks rise as Covid optimism grows
It was a positive day for bank stocks, which rode a wave of renewed optimism over lockdown restrictions.
HSBC and Lloyds were both trading more than four per cent higher at the end of trading, while Barclays was up 3.7 per cent.
The FTSE 100 is also set to benefit from a cheaper pound, as well as optimism over the UK’s vaccine rollout, with 22m doses now given out.
The reopening of schools this morning marks the first stage in the government’s roadmap to end all coronavirus restrictions by the summer.
The announcement that the US has signed off on its long-awaited $1.9 trillion stimulus package also helped to fuel optimism.
“For the UK, sterling has recently levelled out which has left the door open for the FTSE 100 to resume its progress,” said Richard Hunter, head of markets and interactive investor.
“At the same time, the vaccination rollout programme remains on track and ahead of many of its global peers, with the government continuing to provide support until such time as the economy can be left to recover under its own steam.”
Dow Jones resists bond sell-off
In the US Wall Street got off to a strong start, with the S&P 500 up 0.8 per cent, a rebound from Friday, as investors took heart of encouraging non-farm payroll data.
The data showed that the US economy had gained 379,000 jobs since last month and the jobless rate had dipped to 6.2 per cent.
US Treasury Secretary Janet Yellen tried to counter inflation concerns by noting the true unemployment rate was nearer 10 per cent and there was still plenty of slack in the labor market.
However, by the end of trading the Dow Jones was the only index set for real gains, as yields on US 10-year Treasuries pushed back past one-year highs at the 1.6 per cent.
Although the Dow picked up 1.5 per cent, the tech-heavy Nasdaq fell again, plunging another 1.7 per cent to continue its recent sell off.
Since February, where it hit record highs, the bourse has now lost well over 10 per cent, paring all the gains it has managed this year.
The Dow’s gains were triggered mainly by the news that the Senate had passed President Joe Biden’s $1.9 trillion stimulus package. The bill now needs to pass a second vote in Congress before it is signed into law.