Calmed somewhat by the actions of the ECB and Bank of England on Thursday, Europe looked to keep the rebound going on Friday with a fresh round of growth.
Up 4.8% after the bell, the FTSE found itself knocking on the door of 5400 – not bad given at one point on Thursday is struck 4830. What is notable about the UK index’s gains is that they come despite the pound’s own comeback.
Sterling was arguably the single biggest beneficiary of the Bank of England rate cut/bond buying programme announcement, rescued from levels last seen in the mid-80s. That rebound continued on Friday – cable added 2.6% to hit $1.814, while against the euro the pound rose 1.6% to near €1.10. For a bit of all-important context, yesterday the currency was momentarily trading at $1.141; 11 days against it was at sticking its nose across $1.32.
These gains, especially for sterling, are at least in part predicated on the hopes that Chancellor Rishi Sunak is all set to step in with a fresh round of business-protecting measures this Friday. God knows, they need it. Marks & Spencer became the latest high-profile UK firm to warn about the cost of the coronavirus crisis, highlighting the medium-term negative impact it will have, and is already having, on the Clothing & Home division. It went as far as saying that full year pre-tax profit could well be ‘at or below’ the bottom end of its £440-460 million forecasts, comments that send the stock 5% lower.
Slightly less inhibited, the Eurozone indices let rip. The DAX and CAC both climbed more than 6.3% apiece, crossing 9100 and 4100 respectively.
As for this afternoon, the Dow Jones is looking for a 4%-plus increase when trading gets underway in the US, an increase that would see the index eyeing 20900.
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