Global stock markets staged a rebound yesterday fuelled by robust economic data from the United States and expectations of further central bank intervention.
In London, the benchmark FTSE 100 index leapt by almost 108 points, or 1.6 per cent, to close at 6,762.01 following the extended bank holiday weekend. There were rises of 1.2 per cent and 1.4 per cent for Germany’s Dax and France’s Cac-40, respectively.
Markets were hit last week when the US Federal Reserve signalled that it could ease back on its fiscal stimulus programme. However, analysts yesterday said that investors were distancing themselves from the remarks and continued to seek out blue-chip stocks.
The Bank of Japan and European Central Bank have indicated in recent days that they plan to maintain stimulus and that has helped reassure investors. Sentiment was also buoyed yesterday with the release of strong US house price data.
IG analyst Chris Beauchamp said: “What a difference a weekend makes. Last week, markets seemed to have assumed the world, or at least quantitative easing, was coming to an end. After a few days away, however, investors have come back with a far more positive outlook.
“If last week was the dip, then it was shorter than that expected by even the most positive of traders. May is almost out, and the ‘go away and sell’ thesis still hasn’t kicked in.”
The Footsie has risen by some 15 per cent since the start of 2013 and some see it pushing through the 7,000 mark over the summer.