A Huawei (SZ:002502) blacklist-ignoring start from the Dow Jones helped embolden Europe’s lunchtime turnaround on Thursday.
Shooting 200 points higher, the Dow bore down on 25900, the index rebounding hard from Monday’s 25200-appraoching lows. This then allowed the DAX to add 170 points itself, climbing to a one week-plus peak of 12260, while the CAC rose above 5400 thanks to a 1% increase. As for the FTSE, a comparatively disappointing half a percent jump nevertheless still put the UK index at 7330 for the first time in 10 days.
There appeared to be little to prompt these super-charged gains, investors perhaps merely choosing to turn a blind eye to the implications of the Huawei situation to instead focus on the auto tariffs delay report that boosted the markets late on Wednesday.
The FTSE probably should have been even higher given the strength of its mining sector, and the stubborn softness of sterling. With Boris Johnson confirming he will run for Tory leader once Theresa May stands down, the pound was reminded of how long the country’s uncertain climate is going to last, causing the currency to worsen its 3-month lows versus the dollar and the euro, against which it fell 0.4% and 0.2% respectively.
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