The FTSE 100 inched back into the green this afternoon despite news of a third lockdown as the Treasury unveiled a new business support package.
London’s blue-chip index slipped 0.1 per cent at lunchtime but picked back up as US markets opened to stand 0.3 per cent higher at 6,589 points.
Investors’ optimism came as Chancellor Rishi Sunak pledged an additional £4.6bn in support for businesses to help them through the new period of restrictions.
Retail, hospitality, and leisure firms will be able to apply for £9,000 in new grants, adding to billions of pounds of government financial help already given.
Aveva led this afternoon’s biggest risers, up 7.8 per cent while retailer Next climbed 6.4 per cent on the back of a strong trading update this morning.
Energy stocks also did well, with BP and Shell both up around five per cent by 3pm.
The oil giants were helped higher by a recovery in oil prices this morning, though with Opec due to meet later today they could be in for further volatility.
The FTSE is outperforming its continental rivals, with Germany’s DAX and France’s CAC down 0.4 per cent each.
London’s blue-chip index started 2021 with a bang yesterday, outperforming its European rivals to end the day up 1.7 per cent.
At one point, it had been on track for a three per cent rise, driven higher by a rally in mining stocks, but a weaker session on Wall Street dragged on the bourse.
Mid-cap index the FTSE 250 rose 0.5 per cent in the morning’s trading, with IT firm Softcat leading the way with a 8.7 per cent rise.
US stocks open higher ahead of Senate race
In the US, the main markets were bullish ahead of today’s vital Georgia Senate run-off race, the result of which could have huge ramifications for the economy.
The Dow Jones and benchmark S&P 500 are both trading up 0.5 per cent while the tech-heavy Nasdaw is trading up 0.7 per cent.
If the Democrats win both seats, the Senate will be split 50:50, giving incoming Vice President Kamala Harris the deciding vote.
That would shift the balance of the legislature considerably towards President Joe Biden, who has pledged further economic stimulus to help the US through the coronavirus crisis.
“Given the ambitious agenda of the incoming administration, there’s a lot hanging on the vote, the outcome of which will become clear over the coming days,” said Craig Erlam, senior market analyst at Oanda.
“Should the Democrats pull off the, once considered, unlikely double win, stock markets may come under some pressure initially, with the dollar seeing some reprieve,” he added.