Markets push higher as traders shake off second wave fears

25 June 2020, 17:14

City of London stock
City of London stock. Picture: PA

London’s top flight closed 23.45 points higher at 6,147.14p at the end of trading on Thursday.

Markets in Europe lifted higher after a positive afternoon session as trading sentiment strengthened in the face of stark warnings over a potential second wave.

The FTSE 100 increased later in the session, despite the US reporting its largest one-day increase in coronavirus infections since late April and the World Health Organisation warning of a possible surge in post-lockdown infections in Europe.

London’s top flight closed 23.45 points higher at 6,147.14p at the end of trading on Thursday.

Connor Campbell, financial analyst at Spreadex, said: “Against the odds the markets swung positive on Thursday afternoon, as they attempted to claw back some of Wednesday’s heavy losses.

“It seems that investors aren’t yet ready to heed the IMF’s advice about the gulf between the recent market rally – which has taken its knocks of late, but still leaves indices well above their end of March lows – and the realities of a global recession.”

The French and German markets saw particularly strong rallies, ahead of its UK counterparts, in a significant U-turn after a negative start to trading.

The German Dax increased by 0.97%, while the French Cac moved 1.32% higher.

Across the Atlantic, the Dow Jones opened lower due to worse-than-forecast jobless claims reading, which came in at 1.48 million against the 1.32 million forecast. However, it quickly returned to positive territory.

Meanwhile, sterling was mixed after former Bank of England governor Mervyn King cautioned that the global economy could be facing a coronavirus debt time bomb.

The value of the pound fell 0.11% versus the US dollar at 1.240 and was up 0.17% against the euro at 1.105.

Finance firms performed particularly strongly through the session, while a number of leisure stocks slipped amid caution before reopenings next month.

In company news, Royal Mail tumbled lower after it revealed plans to axe around 2,000 management jobs in bid to slash costs in the face of the coronavirus crisis.

The group said the job cuts come as part of a management overhaul under plans to save £330 million over the next two years.

Shares in the company moved 22.35p lower at 157.5p as a result.

Elsewhere, easyJet also dropped lower despite revealing plans to relaunch hundreds of flight from July 1.

The budget airliner also raised £419 million from investors to bolster its finances in the face of the pandemic. Shares closed 70p lower at 670p.

Shares in Mitie Group surged higher after it said it would pay £271 million for a proposed acquisition of Interserve’s facilities management arm.

The deal would leave Interserve shareholders with a cheque for £120 million in cash, and a 23.4% stake in Mitie itself. It closed 14.6p higher at 94.6p.

The price of oil moved higher as traders began bargain hunting after a major sell-off on Wednesday.

The price of a barrel of Brent crude oil increased by 0.99% to 40.66 US dollars.

The biggest risers on the FTSE 100 were JD Sports, up 23.4p at 635.4p, Standard Life Aberdeen, up 9.5p at 264.2p, 3i Group, up 28.8p at 816.8p, and Schroders, up 95p at 2,957p.

The biggest fallers of the day were United Utilities, down 42.8p at 912.4p, Rightmove, down 23.2p at 530p, Compass Group, down 39p at 1,074p, and GVC, down 23p at 745.2p.

By Press Association

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