European stocks managed to eke out gains on Thursday amid a warning that 1.3 million Brits will fall into absolute poverty over the next year.
“Investors appear to be in defensive mood judging by the other stocks dominating the list of FTSE 100 risers. Utilities, precious metal miners and tobacco manufacturers were bid up, with more cyclical stocks in the form of industrial miners, financials and media among the biggest fallers," Russ Mould, investment director at AJ Bell, said.
It comes as the Resolution Foundation criticised Rishi Sunak for not providing more help for low-income families in the Spring Statement on Wednesday.
More than one million people will fall into poverty, including some 500,000 children, thanks to the chancellor delivering a “big but poorly targeted policy package”.
It is the first time Britain has seen such a rise outside of recessions. Typical working-age household incomes are set to fall by 4% in real-terms next year, a loss of £1,100, it said.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “In the UK concerns stay elevated about the knock-on effect that soaring commodity prices will have on business resilience and consumer confidence, after the government’s fiscal plan was criticised for not offering enough medicine to ease the financial pain of higher prices.
“The small steps taken are individually welcome but together they do not do much to ease the increasing burden of the cost of living and cost of commerce crises.”
It came as US jobless claims drop to lowest since 1969 amid strong demand for labour. Initial unemployment claims fell by 28,000 to 187,000 in the week ending 19 March, the Labour Department said. This was below the 210,000 forecast in a Bloomberg survey.
Meanwhile, separate data showed durable goods orders fell 2.2%, a larger than the 0.6% expected and the first decline in five months.
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Stocks in Asia were mixed overnight. In Japan, the Nikkei (^N225) climbed 0.3% while other key markets lagged. The Hang Seng (^HSI) fell 0.9% in Hong Kong, and the Shanghai Composite (000001.SS) dipped 0.6%.
Elsewhere, Russian stocks pushed higher as trading reopened after a record shutdown of the Moscow Exchange since 26 February.
The benchmark index rose 11% in early trading, driven by gains for energy stocks such as Lukoil and Gazprom.
However, the market is only open for a shortened session, with just 33 stocks trading, in a bid to limit a wider sell-off. This includes a ban on short selling and foreigners from withdrawing their investments until next month.
"Russia’s stock market plummeted in February as tension between Russia and Ukraine escalated. Today’s rally only erases a small fraction of the prior losses with another approximately 50% upside to retest the 2022 highs," Victoria Scholar, head of investment at Interactive Investor said.
"The short-selling and foreign selling ban has also provided a ‘put’ in the market, capping further downside."
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