UK shares are continuing to move skywards this morning (March 25) after closing up 9 per cent yesterday on hopes of a US rescue package and following the UK’s lockdown.
The FTSE 100 closed up 9.1 per cent yesterday (March 24) — the biggest one-day gain since 2008 and the second biggest daily jump on record — while the FTSE 250, which is more exposed to the UK domestic economy, rose by 8.4 per cent.
Both the FTSE 100 and 250 have risen again this morning, up 1.5 per cent and 2.8 per cent respectively since markets opened at 8am.
The indices were reacting to the US inching closer to unveiling a rescue package set to shore up businesses and employees against the economic impact of the coronavirus crisis.
News this emergency lifeline had been thwarted in the Senate caused markets to slip this week, but last night US lawmakers struck a $2trn (£1.7trn) stimulus deal to help those hit by the pandemic.
Stocks have risen on the announcement of the deal. The S&P 500 closed 9.3 per cent up yesterday while the Nasdaq finished the day 8.1 per cent higher.
In Europe, the Euro Stoxx 50 opened 2 per cent higher this morning while the Dax was up 2.4 per cent. This followed yesterday's 8.3 per cent and 5 per cent rises respectively.
Karen Ward, chief market strategist EMEA at JP Morgan Asset Management, said: “The Senate’s approval of the $2trn package should provide a positive lift to investors’ moods in the near term, complementing the Federal Reserve’s aggressive action in the past four weeks.
“The key question is whether these policies will be enough to facilitate a rebound once the virus is contained and shutdowns are removed. We suspect US unemployment is already on the rise which will prolong the period of weakness.”
Yesterday’s market moves also followed prime minister Boris Johnson’s strict new measures to limit the number of people infected by the virus.
People were asked to only leave their homes for “very limited purposes” and all non-essential businesses were told to close.
Chancellor Rishi Sunak is expected to include the self-employed in its Covid-19 emergency measures with proposals to cover up to 80 per cent of their earnings later today.
Markets have been volatile over the past few months as the coronavirus has caused countries to close borders, shut down businesses and cancel all non-essential travel.
The spreading pandemic has caused the FTSE 100 to see some of its biggest ever daily dives and rises while the S&P 500 has lost 30 per cent since the start of the year.
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