FTSE 100 climbs on hopes of US stimulus breakthrough
The FTSE 100 opened higher earlier today as hopes that the US would approve a fresh round of stimulus measures boosted investor confidence around the world.
London’s premier index initially rose 0.5 per cent, to 5,896.38 points, currently trading at 5,872.07 as US markets open. The FTSE 250 of mid cap firms rose 0.1 per cent to 17,330.29 points.
Last night US President Donald Trump proposed $1.5 trillion in new measures to boost the ailing economy, including $20bn for the country’s airlines.
The new package, which come after weeks of gridlock in Congress, pushed stocks higher around the world.
In addition, the number of people claiming unemployment benefits in the US fell last week but remained higher than any time before the coronavirus pandemic.
Initial jobless claims totalled 837,000 in the week ending 26 September, down from 873,000 the week prior.
Markets in Asia were also higher overnight, with the Hang Seng up 0.8 per cent as London opened. The Nikkei, however, was flat.
In Europe, Germany’s DAX rose 0.6 per cent to 12,829.16, while the French CAC jumped 1.4 per cent to stand at 4,869.15.
The FTSE was boosted by strong performances from insurers Standard Life and Legal & General, which both picked up over three per cent.
These jumps offset a similar-sized fall in Rolls-Royce’s stock price after the blue chip announced a £2bn equity raise.
Manufacturers leading post-Covid bounce
The increase came as new data this morning showed that the UK’s manufacturers had recorded a fourth consecutive month of growth in September.
According to the latest figures from IHS Markit, PMIs registered at 54.1 for September, a little lower than an earlier flash reading of 54.3. Any reading above 50 signifies growth.
Firms reported an increase in new orders from domestic and overseas markets, but job losses were again flagged as a concern.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Manufacturers are busy meeting orders that were placed in the second quarter but could not be fulfilled, due to component and staff shortages.
“The emergence of other countries from lockdowns also is supporting the upturn in production; indeed, the new export orders index rose to a two-and-a-half year high in September.”
September’s reading was slightly lower than August’s, where manufacturing PMIs hit 55.2.