FTSE extends rally after Dow Jones’ biggest jump since 1933
Wall Street rocketed on hopes of stimulus
London continued to surge higher today, building on overnight gains in Asia and a return of buyers on Wall Street.
The FTSE 100 was almost 300 points higher at 5741 mid-morning before dipping into the red and then resuming its climb to close at 5,688.20, up 242.19 points (4.45%).
Wall Street also continued its rebound, the Dow Jones was up 818.55 (3.95%) as the US Congress passed a $2 trillion economic stimulus package to counter the impact of the coronavirus pandemic.
Asia followed yesterday’s uplifts, Japan’s Nikkei up 4.8%, Australia 3.4% and the South Korean market 3.5% higher.
Tuesday’s rally saw the Dow Jones rise by 11.3%, or nearly 2,100 points, its biggest one-day gain since 1933.
The S&P 500 was up 9.3% – its best day since October 2008, while the Nasdaq gained 8.1%.
Airlines, which have also lost billions in revenue amid widespread travel shutdowns, bounced back. American Airlines stock skyrocketed 35%, while Delta gained nearly 19% and United Airlines rose 24.9%.
The markets were also driven by the G7’s financial ministers and central bank heads saying they would ‘do whatever is necessary’ to protect and eventually restart the international economy, promising cooperation on ‘substantial and complementary packages’ to help out companies struggling in the face of the crisis.
The FTSE 100 closed yesterday 452 points (9.02%) higher at 5,446.01, its biggest one-day rise since 2008.
Oil also ticked up. US crude futures rose 4.5% to $25.10 per barrel.
Japanese shares have been bolstered by aggressive buying from the Bank of Japan.
Despite the sharp rises, analysts have cautioned against the rally lasting and expect more volatility. They are braced for a deep global recession in the wake of sweeping lockdowns in many countries. India and New Zealand have also imposed severe restrictions on movement.
The S&P 500 in the US is still down almost 28% from its record peak hit just over a month ago. Wall Street futures were down 1.1% in early Asian trade.
The biggest uncertainty is on how quickly countries can slow the pandemic and lift various curbs on economic activity.
US President Donald Trump is calling for re-opening of the U.S. economy by mid-April, saying the country has coped with other diseases such a flu.
But his comments were widely condemned, with one analyst saying that unless the containment was allowed to take effect the damage to the economy would be far greater.
The number of cases of coronavirus in the United States is now among the highest in the world, with the total reaching more than 50,000, doubling in less than three days.