The FTSE 100 closed at its highest in more than six weeks today as investor sentiment improved on hopes that European economies will soon start to reopen.
The blue-chip FTSE 100 index rose 1.9 per cent today to finish at 5,959 points, its highest point since early to mid-March.
Traders have been buoyed by the gradual easing of restrictions across Europe as death and infection rates declined to their lowest levels in weeks.
“All the focus will now be on the extent of any increase in infections associated with these cautious steps back towards normality,” said Russ Mould, investment director at AJ Bell.
“These may take a couple of weeks to emerge and the markets may well remain in a nervy mood until then.”
The FTSE managed to shake off dire results from lender HSBC and oil major BP. Investors instead chose to focus on steps towards reopening economies.
Investors have also been buoyed this week by recent stimulus measures from the US Congress and Bank of Japan.
“Stocks have continued to take comfort from the largesse of central banks,” said CMC Markets analyst Michael Hewson.
“Investors appear to be banking on a quick return to normal as governments slowly relax restrictions.”
FTSE 100 looks past HSBC and BP results
Earnings got off to a bad start this morning with HSBC and BP reporting. HSBC’s profit almost halved in the first quarter as the bank prepared for credit losses caused by the Covid-19 crisis.
Meanwhile, BP’s profit fell by two-thirds in the first three months of the year as global demand for oil dries up. However, its shares rose 2.6 per cent today as it kept its dividend in place.
Investor sentiment improved across the day, sending big players that would be well-placed in a recovery higher. British American Tobacco, Prudential, Lloyds Banking Group and Barclays all rose.
US stocks were having a rougher time today, however, as consumer confidence plunged and drugmaker Merck dragged down health stocks.
The S&P 500 was last down slightly while the Nasdaq had fallen 0.7 per cent. The Dow Jones index was 0.2 per cent higher, however.
In a further boon to investors, oil markets regained some lost ground after US government officials indicated that it would provide support to the battered sector.
The WTI crude oil price, the US benchmark, rose 1.1 per cent in US afternoon trading to $12.90 per barrel. Brent crude was up 1.4 per cent to $20.30 per barrel.