The FTSE 100 and global stocks have risen for the second day this week as investors cheer the reopening of economies around the world.
London’s blue-chip index was up 0.9 per cent in early-afternoon trading at 6,220. It rose 1.4 per cent yesterday after US President Donald Trump stopped short of reigniting his trade war with China, as some investors had feared he might.
European stocks also rose. The continent-wide Stoxx 600 was up 1.4 per cent. Germany’s Dax surged 3.4 per cent, catching up lost ground after its day off yesterday for a public holiday.
US stocks were set to open higher, even as protests continued across the country. Demonstrators have taken to the streets for seven days in a row after a white policeman killed black man George Floyd in Minneapolis.
Global stock markets are pushing towards three-month highs as countries emerge from months-long lockdowns. Asian stocks moved higher overnight.
Markets brushed off an escalation of US-China tensions yesterday when Beijing ordered some state companies to reduce American agricultural purchases. Instead, investors are focusing on the return of consumers to shops and streets.
“Global markets continued to climb as hopes for further economic recovery gathered more momentum,” said Jim Reid of Deutsche Bank.
FTSE 100 rally broad-based
The stock market rally in recent days has also been more broad-based than the initial rebound since March’s lows. After markets plunged, resilient stocks such as the tech giants have done the best, but now others are catching up.
Chris Beauchamp, chief market analyst at trading platform IG, said: “For a second day the FTSE 100 is dominated by stocks finding strong inflows thanks to a more optimistic outlook on the global economy.”
“Airlines, travel, engineering, oil and luxury retail are all featured in the big gainers in London this morning, continuing yesterday’s bounce-back theme.”
Aerospace firm Meggitt was the biggest riser today, jumping 10 per cent. It was closely followed by turnaround specialist Melrose Industries, which was nine per cent higher.
Lenders RBS and Lloyds each rose five per cent. Jet engine-maker Rolls-Royce was also five per cent higher.
Oil prices rise as dollar dips
Oil prices rose in a sign that investors expect higher demand. Brent crude was up 2.1 per cent at $39.10 per barrel. WTI crude, the US benchmark, was 1.7 per cent higher at $36.10.
Fawad Razaqzada, market analyst at trading platform Think Markets, said: “Prices have recovered sharply after that historic drop back in April when the front month WTI contract went into the negative territory.”
“Conditions have improved markedly since, thanks to the impact of the huge output cuts by the OPEC and allies,” he said. “And as demand recovered with the easing of global lockdown.”
On the currency markets the dollar was down 0.2 per cent on an index against other currencies. The pound was up 0.5 per cent against the greenback at $1.255.