The FTSE 100 rose but Wall Street was mixed as investors weighed a record daily rise in new coronavirus cases in the US against the reopening of economies.
The UK’s main stock index was 0.6 per cent higher in afternoon trading at 6,083 points. The FTSE 250 index of slightly smaller jumped 1.2 per cent.
In the US, the S&P 500 fell 0.1 pr cent shortly after the bell. The Dow Jones moved 0.2 per cent higher but the Nasdaq slipped 0.4 per cent.
Germany’s Dax was 0.7 per cent higher. France’s CAC 40 was up 0.6 per cent and the pan-European Stoxx 600 had climbed 0.5 per cent.
The moves in global stock markets came the day after the US notched up another record day of new coronavirus cases yesterday, with more than 60,000.
Florida, which reopened some parts of the economy in May, suffered its biggest daily death toll yet.
Shares in Asia were lower as a spike in cases in Hong Kong caused authorities to say they would shut schools.
The semi-autonomous city’s Hang Seng index shed 2.4 per cent overnight. Japan’s Nikkei index fell 1.1 per cent.
In China, the CSI 300 index fell 1.8 per cent, bringing its eight-day surge to an end.
FTSE 100 on track for sharp weekly fall
Despite the rise in the FTSE 100, the index was on track for a weekly fall of around two per cent.
London’s blue-chip index has dragged behind many other countries in the recent stock market rally. Its exposure to energy and banking has been a particular weak point.
The US’s S&P 500 was also on track for a weekly fall. As was Europe’s Stoxx 600.
There is a growing feeling in markets such that “things are going backwards in terms of the health emergency,” said David Madden, market analyst at trading platform CMC Markets.
“Yesterday, it was reported that Tokyo posted a record number of new cases.”
Investors fear new lockdowns could damage economic recoveries. Madden said data showed “footfall at retail parks in states such as Arizona, Georgia, and Texas has declined as they have rowed back on the reopening of their economies”.
The pound was up 0.4 per cent against the dollar at $1.265. The euro was also down 0.3 per cent at $1.132.
UK bond yields hit all-time low
In a sign of investors’ nerves, UK short-dated bond yields touched record lows in morning trading as the FTSE 100 initially fell.
The yield on the 2-year bond or gilt dropped to minus 0.122 per cent before rebounding slightly. The yield on the 5-year gilt dropped to minus 0.09 per cent before rising. Yields move inversely to a bond’s price.
The fall in bond yields was largely driven by “rising speculation that the Bank of England will cut rates into negative territory in September,” said Michael Hewson, chief market analyst at trading platform CMC Markets.
“While many are warning of the perils of going down this route there is a growing belief that the Bank of England could well do so in September.”