Markets boosted by lockdowns easing and positive noises from Central Banks

Stock markets around the world had a boost on Monday after positive economic noises from the Bank of England and US Federal Reserve over the weekend and a surge in oil prices created a bullish mood.

In London, the FTSE 100 closed the day up 248.82 points, or 4.29%, at 6,048.59, dragged up by strong performances by oil majors and strong results from Ryanair boosted rival airlines.

But the overlying sense of optimism was boosted by comments from US Fed chair Jerome Powell, suggesting in an interview that more spending could be coming to tackle the coronavirus crisis.

And the Bank of England’s chief economist Andy Haldane said in an interview on Sunday he would not rule out negative interest rates in the UK, if required.

David Madden, market analyst at CMC Markets UK, explained: “Governments have been easing up on their lockdown restrictions, and dealers are hopeful those tactics will continue.

“In addition to that, the reopening of businesses should help stop the rot in terms of the horrendous economic reports that have been witnessed recently. Traders are taking the view we are over the worst of the crisis, hence why the buying momentum is so strong.”

On the US Fed’s comments, he added: “The central banker projected an air of confidence as he believes the US economy will steadily recover in the second half of the year.

“Mr Powell warned the bears not to bet against the US economy, which is part of the reason why the bulls are out in force.”

The pound rose 0.7% against the dollar at 1.219 dollars and fell 0.15% against the euro to 1.117 euros.

But the surge in oil really pushed on shares on the FTSE 100, with Brent oil up 9% to 35.48 dollars a barrel at 35.48 US dollars a barrel at the London equities close on Monday, from 32.5 dollars on Friday night.

This helped BP shares climb 24.3p, up 8.2%, to 320.8p and Royal Dutch Shell ‘A’ and ‘B’ shares up 102p, or 8.3%, to 1,330p and 96.2p, or 8.2% to 1271.8p respectively.

In company news, the top blue-chip performers were airlines, with International Consolidated Airlines up 18.7p, or 11%, to 188.15p and EasyJet up 52.3p, or 10%, to 551.6p.

This came on the back Ryanair’s results revealing sales in the financial year that ended March 31 were up 10%.

But it was comments by chief executive Michael O’Leary saying families could be flying again by the autumn that caused the movement.

Restaurant Group shares got a bump, up 7.7p, to 46p as rival, the Casual Dining Group, confirmed a notice of intent to appoint administrators had been filed over its chains Bella Italia and Cafe Rouge.

A group of angry Hiscox policyholders have been given the go-ahead to launch legal action against the insurance giant over the firm’s decision to exclude coronavirus disruption from its business interruption policies.

Investors appeared unperturbed by the move, with shares closing up 9.8p at 709.6p. Mishcon de Reya, the city law firm leading the case, says that over 400 policyholders have signed up with almost £40 million in claims against the insurer.

And away from Covid-19, drugmaker GlaxoSmithKline has cut short a drug trial after a new HIV treatment proved so effective researchers did not feel it was necessary to continue. The news sent shares up 39.4p to 1687.2p.

The biggest risers on the FTSE 100 were Carnival, up 129.2p to 1,015p, Anglo American, up 166.4p to 1,600.2p, IAG, up 18.7p to 188.15p, EasyJet, up 52.3p to 551.6p, and Intercontinental Hotel Group, up 331p to 3,568p.

The biggest fallers on the FTSE 100 were Ocado, down 51p to 1,903.5p, Morrison, down 0.85p to 188.85p, and Auto Trader, down 2p to 500p.