FTSE 100 climbs 16% from lows

London shares extended gains for a second session on Wednesday as an imminent US stimulus package and moves by companies to deal with the financial effects of the coronavirus crisis offset the impact on markets of a surge in cases domestically.

The FTSE 100 closed up 4.5 per cent following its biggest percentage gain on Tuesday since the wild swings of the 2008 financial crisis, according to Reuters.

That aided a 16 per cent recovery from the lows hit last week as investors pinned hopes on massive steps by central banks and governments to cushion the economic impact of the pandemic.

US senators are set to vote on a $2tn (1.69 trillion pounds) package of legislation, expected to include a $500bn fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of US families.

“What the European, British or the US governments have done in terms of stimulating the economy has helped, but I don’t think we’re out of rough times” said Simon Calton, chief executive officer at Carlton James in London.

Volatility was still in play, driving the blue-chip FTSE index down 0.8 per cent in late morning trading. It recovered as oil companies and other recently battered stocks surged.

The health crisis continued to deepen, with Britain seeing its biggest daily jump in the death toll from coronavirus on Tuesday. Prince Charles, the 71-year-old heir to the British throne, tested positive for the virus.

Businesses listed more damage, with housebuilder Persimmon Plc and retirement home developer McCarthy & Stone starting an orderly shutdown of their construction sites.

Pest control company Rentokil Initial Plc dropped 8.2 per cent as it withdrew its 2020 outlook and suspended dividend payments even as it saw a surge in demand for its specialist hygiene and disinfection services.

Source: Punchng, March 26, 2020