The FTSE 100 rose slightly on Thursday, helped by the accommodative stance of the Bank of England, keeping its monetary policy unchanged in times of crisis.
The blue-chip FTSE 100 finished up 0.6%, with drugmaker AstraZeneca and miners Anglo American, Rio Tinto and BHP Group providing the biggest boost to the index. As mining and health-related stocks rose in the index, cruise line Carnival fell after posting a quarterly loss of more than $ 2 billion.
The domestically-focused mid-cap FTSE 250 fell 0.5%, following disappointing half-year results from engineering and consulting firm Wood that pushed the company’s shares down 8.9% at a year-over-year low.
All eyes were on the Bank of England meeting, where the Monetary Policy Committee decided to keep its benchmark interest rate at an all-time low of 0.1%. However, he warned that inflation would exceed 3%, well above its target of 2%, as the economy reopens coronavirus lockdowns.
“As the inflation figures continue to be higher than the central bank forecast, the pressure will increase more and more to embark on a path of more normal policy,” said Ambrose Crofton, policy strategist. global markets at JP Morgan Asset Management, as quoted by Reuters.
“All of this suggests that the bank may end up having to withdraw support faster than its international peers.”
“We believe the bank is waiting until its August meeting before providing a clearer indication of the future direction of its policy,” said Matthew Ryan, CFA, senior market analyst at the global financial services firm. Ebury. The independent in a report.
“At this point, the bank should have a much better idea of both the nature of the inflation spike and the impact of unlocking the foreclosure on economic activity. We remain of the view that the Bank of England will start raising rates ahead of the Federal Reserve and the European Central Bank, possibly as early as Q3 2022, ”Ryan said.
Meanwhile, global markets also received a boost as concerns about the US Federal Reserve’s stance faded. Of the three main Wall Street indices, two indices – the S&P 500 and the tech-heavy Nasdaq Composite, hit record highs, while the Dow Jones Industrial Average rose 322 points, or nearly 1%.
By releasing its annual stress report, the Fed has given a positive indication of US banks and their ability to weather a recession. He said the 23 institutions in the 2021 review were staying “well above” minimum capital requirements during a hypothetical economic downturn, helping bank stocks on Wall Street to rise.
Bank of America and Wells Fargo rose 1.8% and 2.7% respectively.
Another indication of the recovery of the US economy, weekly jobless claims fell by 7,000 last week.
Media firm BuzzFeed announced on Thursday that it would go public through a merger with blank check firm 890 5th Avenue Partners in a deal valuing online media at $ 1.5 billion. dollars.
Meanwhile, Asia-Pacific stocks surged higher on Friday, following gains in the United States. Japan’s Nikkei has opened over 200 more points and continues to maintain levels. The Hang Seng opened positively and jumped over 1.1% in the first half of the trade. Shanghai Composite also jumped 1%.
Indian indices, however, opened flat on Friday despite positive global indices, after heavyweight Reliance fell. At the start of the trade, Sensex stayed near the flat line, while the Nifty opened higher but collapsed later.
Additional contributions from agencies
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This notice was published: 2021-06-25 06:15:59