UK Markets open in 7 hrs 50 mins

London stocks gain after government, BoE extends stimulus programme

Devik Jain
·2-min read
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Devik Jain

(Reuters) - London stocks rose on Thursday after the government and Bank of England both ramped up stimulus programmes to cushion the struggling economy as England goes into a second national lockdown.

The blue-chip FTSE 100 index <.FTSE> closed 0.4% up, with shares in insurer RSA Insurance Group Plc <RSA.L> surging 45.7% after it reported a rise in underwriting profit and said pandemic-related exclusions would limit lockdown impacts.

The domestically focused mid-cap FTSE 250 <.FTMC> ended 0.7% higher after finance minister Rishi Sunak extended the government's costly coronavirus furlough scheme until the end of March and announced billions of pounds in other forms of support.

Earlier on Thursday, the BoE expanded its already huge asset purchase programme by a further 150 billion pounds helping the government to fund the surge in public spending.

"Today's announcements are vital steps to shelter the UK economy through a difficult winter. The extension of the furlough scheme will help provide a much needed bridge for households and businesses until the economy can reopen," said Ambrose Crofton, global market strategist at J.P. Morgan Asset Management.

"However, the risk remains that for many businesses, faced with the uncertainty of how long this crisis may last, they may decide to make lasting decisions to either cut jobs or cease trading."

Focus was also on the U.S. presidential election race, with Democrat Joe Biden edging closer to victory, while incumbent President Donald Trump pursued a litigation strategy as election officials tallied votes in the handful of states that will decide the outcome.

Auto distributor Inchcape Plc <INCH.L> jumped 6.6%, after a beat-and-raise quarter, while Trainline Plc <TRNT.L> jumped 12.5%, as JP Morgan upgraded the stock to 'overweight' after first-half results.

Supermarket group Sainsbury's Plc <SBRY.L> tumbled 5.2% after it reported a first-half pretax loss and warned of 3,500 job cuts in restructuring.

(Reporting by Devik Jain,; Editing by Alexandra Hudson)