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Markets close higher after EU rescue package sparks positive sentiment

PA City Staff
·3-min read

The London markets nudged higher despite a decline in European trading sentiment after the EU’s 750 billion euro rescue-package had sparked early positivity.

US trading was also bolstered by a significant retreat in US Covid-19 cases, but Europe’s key markets nevertheless cooled after traders took stock of the eurozone funding deal.

The FTSE 100 closed 8.21 points higher at 6,269.73p at the end of trading on Tuesday.

David Madden, market analyst at CMC Markets UK, said: “The confirmation that a compromise was reached came through in the early hours of today, and that helped stocks get off to a flying start this morning.

“The 750 billion euros fund will be divided into 390 billion of grants and 360 billion of loans, and keep in mind the initial proposal was for 500 billion in grants and 250 billion in loans.

“Stocks are off the highs of the session, probably because traders felt that some sort of a compromise was always going to be achieved in the end.”

Meanwhile, sterling jumped higher on trading excitement ahead of US Secretary of State Mike Pompeo’s arrival in London, and the potential US-UK trade talks that might follow.

The pound rose 0.57% versus the US dollar at 1.273 and was up 0.17% against the euro at 1.108.

Across the Atlantic, the Dow Jones soared after it was revealed that Monday saw just shy of 60,000 new Covid-19 cases in the US, highlighting a major improvement.

The major European markets missed intra-day highs after a storming opening.

The German Dax increased by 0.94%, while the French Cac moved 0.23% higher.

In company news, shares in Ladbrokes owner GVC plunged after it said it is under investigation by the UK tax authorities over its former Turkish online gambling business.

It told investors that HM Revenue & Customs is to probe the business regarding “potential corporate offending” at the Turkish arm.

Shares tumbled by 102p to 770p at the close of play as a result.

TalkTalk nudged lower after the telecoms firm said headline revenues fell to £358 million in its first quarter to June 30 from £387 million a year earlier due to trading restrictions and cancelled live sports.

Shares in the company closed 1.5p lower at 78p after it posted a sharp fall in the number of new fibre broadband customers it added on a net basis, at 67,000 in its first quarter against 118,000 a year earlier.

Ted Baker shares surged as the group hailed “resilient” trading after a better-than-feared sales hit from the coronavirus crisis.

It closed 10.2p higher at 80.8p.

Bloomsbury investors cheered the publisher’s latest update, as it revealed it surpassed trading targets for the past four months as demand for books surged during the lockdown.

Shares jumped 27p to 227p.

The price of oil hit its highest level since early March as the overall feel good factor in the markets boosted the energy.

The price of a barrel of Brent crude oil increased by 2.96% to 44.5 US dollars.

The biggest risers on the FTSE 100 were Hargreaves Lansdown, up 161p at 1,750p, Rolls-Royce, up 20.8p at 285.6p, BP, up 12.75p at 315.95p, and Whitbread, up 85p at 2,365p.

The biggest fallers of the day were GVC, down 102p at 770p, Persimmon, down 87p at 2,517p, Avast, down 19.5p at 577p, and AstraZeneca, down 272p at 9,048p.