The FTSE 100 surged above 6000 last night amid hopes that a coronavirus vaccine and more stimulus measures could power an economic recovery.
As global markets rallied, the Footsie rose 4.3 per cent, up 248.82 points, to 6048.59. This marked its highest close this month and its biggest one-day percentage jump since late March.
Traders were buoyed by news from Boston-based biotech company Moderna, which reported positive results from the first human trial of its possible vaccine. But it was interventions from the US and Europe that really put a rocket under stocks.
Jerome Powell, the chairman of the US central bank, said the Federal Reserve was ‘not out of ammunition by a long shot’ and could take more measures to help the economy.
And France’s Emmanuel Macron and Germany’s Angela Merkel have jointly proposed setting up a £450 billion European Recovery Fund.
The announcement came a little late in the day to be digested fully by traders in London, but the European package helped send the Dow Jones 3.71 per cent higher and the Nasdaq up by 2.6 per cent.
Virtually all of the companies on the Footsie made gains yesterday, with just Ocado (down 2.6 per cent, or 51p, to 1903.5p), Morrisons (down 0.5 per cent, or 0.85p, to 188.85p) and Auto Trader (down 0.4 per cent, or 2p, to 500p) falling into the red.
The burst of optimism as some of the worst-hit countries have begun unwinding lockdown measures lifted shares in embattled travel firms.
Cruise ship operator Carnival was the biggest riser, climbing 14.6 per cent, or 129.2p, to 1015p, while British Airways-owner IAG gained 11 per cent, or 18.7p, to 188.15p and Easyjet jumped 10.5 per cent, or 52.3p, to 551.6p. Holiday Inn-owner Intercontinental Hotels Group was also in investors’ favour, adding 10.2 per cent, or 331p, to 3568p.
Oil stocks also climbed as crude prices made a dramatic rebound. The easing of lockdown means there is increased demand for petrol as people start travelling again – and potentially more need for jet fuel if global flying partially resumes in the coming months. Brent crude rose more than 7 per cent to $5 a barrel last night.
US benchmark West Texas Intermediate, which was trading at negative prices mere weeks ago, also lifted 7 per cent to $31.50. BP rose 8.2 per cent, or 24.3p, to 320.8p and Shell gained 8.2 per cent, or 96.2p, to 1271.8p.
The rally in stock markets took the shine off gold prices by the end of the day – but not before it hit its highest level since October 2012 as worries about the pace of economic recovery and souring US-China relations prompted some people to stock up on the safe haven. Fresnillo (up 9.1 per cent, or 67.4p, to 805p) and Anglo American (up 11.6 per cent, or 166.4p, to 1600.2p) were some of the big winners yesterday, but the mid-cap gold miners made gains on news of their own.
Hochschild Mining was up 12.1 per cent, or 19.6p, to 181p, after announcing it would restart production at its Inmaculada and Pallancata mines in Peru – and aim to get production back up to full blast – in the next few weeks.
Centamin, which fought off a hostile takeover attempt from Canada’s Endeavour Mining in January, rose 1.1 per cent, or 2p, to 178.45p after reporting its revenues in 2019 jumped 7 per cent to £540m and profits by 13 per cent to £142m.
Elsewhere, scandal-hit iron ore miner Ferrexpo gained 5.6 per cent, or 7.9p, to 149.2p after it appointed James ‘Jim’ North as acting chief executive.
Six months ago founder and former boss Kostyantin Zhevago temporarily stepped aside to resolve problems at his former business in Ukraine.
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