UK shares surge on China central bank measures
UK shares leaped on Tuesday as China’s central bank took steps to support the economy
UK shares leaped on Tuesday as China’s central bank took steps to shore up the economy, easing fears about the global impact of the coronavirus epidemic, while positive corporate reports from blue-chips added momentum.
According to Reuters News, the FTSE 100 .FTSE jumped 1.6 per cent, with the leader board dominated by BP, which rose 4.2 per cent after increasing its dividend, and plumbing parts distributor Ferguson up seven per cent at a record high as it mulls listing shares in the United States.
The FTSE 250 .FTMC was also tracking Asian stock markets higher, adding 1.3 per cent Both British benchmark indexes recorded their strongest day since mid-December.
China’s central bank has injected 1.7 trillion yuan through reverse repos into its market this week, amid the fast-spreading epidemic that has killed more than 420 people.
Support from the PBOC (People’s Bank of China) is helping stabilise things, whilst there does not yet appear to be a serious escalation in the rate of new cases in China, Markets.com analyst Neil Wilson said, adding that tentative signs of a plateauing in new cases will be supportive of risk.
Though worries over the fallout from the coronavirus linger, markets are staging a comeback following a sell-off last week, with generally upbeat corporate earnings and economic data soothing some nerves.
Analysts at BlackRock said they expect these factors to support further global growth this year, though the unknown magnitude and duration of the outbreak poses downside risks.
Shares of Glencore jumped 5.2 per cent as the miner maintained its 2020 production targets.
NMC Health ended 3.3% lower despite it reassuring investors that its trading for 2019 was in line with expectations. It had climbed as much as 9 per cent earlier in the day.
Its stock has shed more than half its value since December when it came under attack from U.S. short-seller Muddy Waters.