Wall Street lifted by Covid-era low jobless claims
US stocks opened up sharply on Thursday morning after investors were boosted by fresh data showing the American labour market recovery still has legs.
The blue-chip S&P 500 gained 0.43 per cent to reach 4,421, while the Dow Jones shot up 0.6 per cent to 34,998.
The tech-heavy Nasdaq notched the best performance out the US’ three main benchmarks, up 0.68 per cent to 14,880.
Investor sentiment improved as new figures showed continuing jobless claimed fell by over 300,000 to hit the lowest level since the onset of the Covid crisis.
Yields on ten-year US Treasuries inched up to 1.21 per cent on the news.
Read more: Bank of England to tighten monetary policy to tame runaway inflation
FTSE 100 dips as Bank of England maintains stimulus
London’s FTSE 100 dipped in afternoon trading as investors digested news the Bank of England will maintain its ultra-loose monetary stimulus despite predicting inflation will run at double the rate of its target towards the end of the year.
The capital’s premier index edged down 0.06 per cent to 7,119 during late afternoon exchanges.
The Bank of England left rates unchanged at 0.1 per cent and stuck to its bond buying programme that is targeting swelling the Old Lady’s debt holdings to £895bn by the end of this year, despite forecasting that price rises will reach four per cent in the fourth quarter of 2021.
Read more: Bank of England’s MPC meeting: Who will take Haldane’s hawkish reins?
The Bank did signal its intent to wind down monetary stimulus to tame inflation once its main rate hits 0.5 per cent, the first time it has done so since unleashing support for the economy in response to the Covid crisis.
Philip Shaw, economist at Investec, said: “Unsurprisingly the vote on the Bank rate was unanimous. As former Chief Economist Andy Haldane has yet to be replaced on the committee, the vote was 8-0. However Haldane’s legacy of preferring to pare back the remaining gilt buying struck a chord with one member.”
The pound gained 0.25 per cent against the greenback to buy $1.39.
The domescially-focused FTSE 250 bucked the trend of its senior partner and added 0.68 per cent to reverse early morning losses, while AIM shares fell 0.22 per cent.
Winners and losers
Aerospace engineer Rolls Royce led the morning’s gains, shooting up 5.87 per cent to 110.68p after the FTSE 100 company posted a strong set of results showing it swung back to profit in the first half of this year.
Hotel and hospitality group Whitbread came second, increasing 4.66 per cent to 3,234p.
Read more: WPP raises forecast, following further revenue growth
British Airways parent company IAG came third, rising 4.35 per cent to 178p after the government announced several holiday hotspots will move to move to the green travel list.
Miners led the day’s losses. Anglo American slid 5.04 per cent to 3,270.50p, while Rio Tinto dropped 4.21 per cent to 6,027p.
BHP placed as the third worst performer, down 3.8 per cent to 2,280p.
Around the world
Asian shares posted poor performances in overnight trading as investor fears that a sharp rise in Covid cases in the country could sweep across the region and trigger a reintroduction of restrictions on economic activity.
China’s CSI 300 fell 0.61 per cent and Hong Kong’s Hang Seng dropped 0.65 per cent.
Japan’s Nikkei fared better, up 0.52 per cent.
European shares were solid on Thursday – the Stoxx 600 rose 0.36 per cent.
Read more: Sunday Read: Bank of England’s QE programme has muddied the water between right and wrong