- FTSE 100 gains 4.5% on Wednesday on optimism of the U.S stimulus package.
- FTSE 100 closes 16% up on Wednesday as compared to the last week's low.
- U.S lawmakers to vote on a £1.69 trillion rescue package on Wednesday.
The White House is getting closer to finalizing its stimulus package to support economic growth amidst the Coronavirus pandemic. The optimism of an imminent U.S aid package sent London shares up on Wednesday.
The benchmark FTSE 100 index closed 4.5% up on Wednesday following Tuesday’s remarkable gain that was branded its largest in percentage since the financial crisis of 2008.
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FTSE 100 Climbs 16% From The Last Week’s Low
Hitting the 4,993 level, the FTSE 100 index recorded a multiyear low last week. The index closed at 5,634.67 on Wednesday that marks an around 16% gain from the last week’s low. Investors are now fixating on the governments and central banks to announce aggressive measures to combat the economic impact of the flu-like virus.
U.S lawmakers are expected to vote on the recently proposed £1.69 trillion rescue package that will direct approximately £420 billion in financial support to businesses that have taken the hardest hit amidst the health emergency. A similar amount will also be targeted at millions of needy families in the United States at £2,500 per family.
An analysis of the daily chart shows the blue-chip index still practiced volatility on Wednesday. The index was reported 0.8% down earlier this morning. The loss, however, was recovered as a range of recently hit stocks especially oil companies caught steam later in the day.
But the health crisis is not yet over for the UK. On Tuesday, the country posted its sharpest increase in COVID-19 related deaths. As of Wednesday, 71-year-old Prince Charles, who is the legal heir to the British throne, has also been infected with the virus.
McCarthy & Stone And Persimmon Plc Resort To A Temporary Shutdown
To help minimize the fast transmission of the deadly virus, McCarthy & Stone and Persimmon Plc also resorted to a temporary shutdown. Rentokil Initial Plc (LON:RTO) took the lead among decliners on Wednesday with a massive 8.2% drop in the stock market which was sufficiently offset by a 23% increase in the travel-food company, SSP (LON:SSPG).
Despite Halfords’ (LON:HFD) warning that its sales are likely to take a 25% hit, its stock climbed 26% on Wednesday attributed to the retailer’s confidence in its debt facilities. Halfords also declared its dividend suspended for 2020.
The STOXX 600 listed businesses are now estimated to see a 14.9% drop in earnings in Q2 versus an 8.2% decline that was forecast last week.