The FTSE 100 rose further today as it soared nearly 5 per cent after US politicians agreed a mammoth stimulus package in the fight against coronavirus.
The index of Britain’s biggest companies went up by 259 points or 4.8 per cent to 5,705 points this morning, putting it at its highest level for nearly two weeks.
This saw it build on early gains when it rose 2 per cent upon opening – and after its largest ever points gain yesterday.
Traders now have a rare semblance of optimism after weeks of carnage across global markets, with stock markets in Asia also soaring overnight. The FTSE 100 is now at its highest level since March 13.
While the deadly infection continues to spread, the eyes of investors fixed on Washington DC last night where politicians thrashed out an emergency bill worth as much as $2trillion (£1.7trillion) – around 10 per cent of US gross domestic product.
Wall Street also soared yesterday, with the Dow Jones seeing its biggest rise since 1933, while the S&P 500 enjoyed its best day in more than a decade.
THIS WEEK: The FTSE posted a record points gain yesterday, before rising again today
It comes after a record rise yesterday for the FTSE 100 which jumped 9 per cent, or 452.12 points, to 5446.01 – its largest ever points gain.
It was also the second biggest percentage gain for the index since a 9.8 per cent rise in November 2008 during the financial crisis.
Yesterday’s surge added £113billion to the value of Britain’s biggest companies.
However, the FTSE 100 index is still down 26 per cent from its value on February 24 – and analysts said that it was too early to call the end of the market rout.
‘In terms of the follow through, it’s quite encouraging to see this morning,’ said Roger Jones, London & Capital’s head of equities. ‘We have a situation where all the central banks and governments are saying we’ll do whatever it takes.’
PAST FORTNIGHT: The FTSE has started to recover some of its losses over the last two weeks
Mike Owens, global sales trader at Saxo Markets, told MailOnline today: ‘A mixture of factors are playing into the strong move higher that we’ve seen on the FTSE and for global equity markets more generally.
‘Firstly, the agreement from the US Senate on a $2trillion coronavirus stimulus package which the market sees as a key needed support and secondly, equities were looking extremely oversold at their levels on Monday evening which justified a bounce technically.
‘Lastly, investors seem to be dusting themselves off and taking the opportunity to pick up stocks at beaten up prices as the most heavily sold off companies gain the most.’
The FTSE 100 is up about 15 per cent since hitting an eight-year low last week as the Bank of England cut interest rates to a record low and the Government promised businesses loan guarantees and offered to pay 80 per cent of their wage bills if they put staff on leave rather than sack them.
The prospect of a massive spending US spending splurge sent Wall Street into overdrive yesterday, with the Dow Jones (above) seeing its biggest rise since 1933
The New York Stock Exchange has been closed temporarily due to coronavirus fears
The new measures in the US will put cash directly into the hands of Americans, provides grants to small businesses and hundreds of billions of dollars in loans for corporations including embattled airlines, while expanding unemployment benefits.
The unprecedented moves are part of a worldwide response to the rapid financial shock caused by the coronavirus outbreak, which has locked down countries including the US and brought the global economy to a juddering halt.
The prospect of a massive spending splurge, combined with the Federal Reserve’s pledge to essentially print as much cash is needed, sent Wall Street into overdrive yesterday, with huge rises on the Dow and S&P 500.
And the gains spread into Asia, which rallied for a second straight day, with extra impetus later in the day coming from the news out of Washington.
A man walks past a board showing the 225-issue Nikkei Stock Average data in Tokyo today
People wearing face masks walk past a bank showing the Hong Kong Stock Exchange today
Tokyo ended 8 per cent higher, with investors there also relieved that the 2020 Olympics had been postponed rather than cancelled.
Hong Kong and Singapore put on more than 3 per cent and Shanghai was up more than 2 per cent, Sydney and Manila rallied more than 5 per cent and Seoul piled on more than 4 per cent.
Taipei added almost 4 per cent, while Mumbai, Bangkok and Wellington were also well up.
Adding to the more upbeat mood was the G7’s promise to do ‘whatever is necessary’.