FTSE 100 opens up 4 per cent to 5,191 points as investors react to Boris Johnson’s UK coronavirus lockdown and US Federal Reserve’s pledge to print cash
- FTSE 100 index of leading UK companies opens 198 points up at 5,191 today
- Rises in London comes after Asian markets soared overnight, with Tokyo up 7%
- US Federal Reserve unveils huge bond-buying programme to support economy
- Coronavirus symptoms: what are they and should you see a doctor?
The FTSE 100 opened up 4 per cent today as investors reacted to Boris Johnson’s UK lockdown and the US Federal Reserve unveiled a huge bond-buying programme to support the American economy.
The index of London’s leading companies opened 198 points up at 5,191 this morning after Asian markets also surged overnight.
It comes after more than £60billion was wiped off the FTSE 100 yesterday – taking total losses since the coronavirus pandemic up to £793billion.
Boris Johnson has placed the UK on lockdown to tackle the coronavirus, threatening police fines for anyone who ignores new measures including a ban on public gatherings of more than two people.
People wearing masks walk past a display showing the closing information of Tokyo’s Nikkei Stock Average in Tokyo today. It soared 1,205 points, or 7.13 per cent, to close at 18,092
The Prime Minister detailed a short list of reasons why individuals can leave their homes as he ordered the immediate closure of all shops selling non-essentials items yesterday evening.
He ordered people to only leave the house to shop for basic necessities “as infrequently as possible” and to perform one form of exercise a day.
While most of the planet goes into lockdown, traders gave a massive thumbs up to the US central bank’s pledge to essentially print cash in a move not seen since the global financial crisis more than a decade ago.
The Fed, which has already slashed interest rates to record lows, said it will buy unlimited amounts of Treasury debt and take steps to lend directly to small- and medium-sized firms hammered by restrictions across the country.
Equities in Asia rallied overnight with Tokyo ending more than 7 per cent higher.
A staff worker wearing a protective mask talks on a mobile phone by a monitor showing the current stock information at Shanghai Stock Exchange Building in China today
The Nikkei was given extra lift by a Bank of Japan decision to embark on its own massive bond-buying scheme.
Seoul was up more than 8 per cent, Hong Kong, Sydney, Singapore and Taipei each rose more than 4 per cent, and Wellington lifted more than 7 per cent.
Shanghai and Mumbai added 2 per cent, Bangkok more than 1 per cent and Manila 0.7 percent, though Jakarta fell almost 1 per cent.
AxiCorp’s Stephen Innes called the Fed’s move ‘the most significant monetary experiment in the history of financial markets’.
‘Asian investors like what they see from an all-in Fed, which is being viewed in a very impressive light for both Main and Wall Street, even as the US congress dithers,’ he added.
Chancellor Rishi Sunak went some way to providing this certainty last week with his promise to pay 80 per cent of the wages of employees who were forced out of work, up to £2,500 a month.
While investors have been hoping the market pessimism soon bottoms out, some experts think the falls could continue for some time.
Sixth Street Partners, the debt arm of private equity giant TPG, sent out a grim letter to investors last week warning coronavirus would bring ‘unprecedented revenue destruction’ to even the biggest companies.
The International Monetary Fund (IMF) called for ‘solidarity’ between countries.
Speaking after a meeting of the G20’s finance ministers and central bank governors, its managing director Kristalina Georgieva said: ‘The human costs of the coronavirus pandemic are already immeasurable and all countries need to work together to protect people and limit the economic damage. This is a moment for solidarity.’