The FTSE 100 pushed slightly higher today as final confirmation of a bumper $1.9 trillion US stimulus package cheered investors.
The blue-chip index was up 0.17 per cent at 6,736 points by market close, while the domestically-focused FTSE 250 pushed 0.59 per cent higher.
Mining stocks such as Rio Tinto, Anglo American and BHP Group, as well as oil majors BP and Shell were boosted by strong commidity prices and continued their run of good form to help buoy the index.
It came after the US House of Representatives last night gave final approval to a $1.9 trillion Covid relief bill — one of the largest economic stimulus measures in US history.
It was less rosy for supermarket chain Morrisons, however, which fell 0.99 per cent after its annual profit halved as a result of coronavirus-related costs.
“’Morrisons’ ego was already bruised after being relegated from the FTSE blue chip league in the latest reshuffle and these latest results underline just how tough the year has been for the grocer,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
On Wall Street, the easing inflation worry helped support equities, with the highly valued technology sector leading the way higher, up 2.40 per cent. Expensive stocks, many of which are in the tech sector, have been highly sensitive to the rise in yields.
In contrast, shares of bank stocks lost 0.25 per cent.
“The rates pulling in, as modest as the pull in has been, is a big stimulus for the market,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“For now, things are good. Yeah, there is a question of leadership between growth and value but I don’t think either one is going to fall far behind the other in this environment and we see that with this back and forth.”
The Dow Jones Industrial Average rose 292.27 points, or 0.9 per cent, to 32,589.29, the S&P 500 gained 53.17 points, or 1.36 per cent, to 3,951.98 and the Nasdaq Composite added 339.40 points, or 2.6 per cent, to 13,408.23.
Sentiment was also boosted by weekly jobless claims data, which pointed to a recovering U.S. labor market as vaccine rollouts have helped lead to economic reopenings.
While the FTSE finished in positive territory today, the European indicies were also up marginally by trading close.
Germany’s Dax finished up 0.2 per cent, while the French Cac 40 was up 0.72 per cent.
The cautious trading comes ahead of a meeting of the European Central Bank this afternoon, where it will set out its monetary policy across the Eurozone.
“Despite a record close for the Dow Jones, and the passing of the American Rescue Plan, the prospect of Thursday’s ECB meeting led to a quiet start for Europe,” said Connor Campbell at Spreadex.
“The FTSE could really do with picking up the pace. While its miners – the index’s biggest burden this week – rebounded after the bell, the FTSE itself only managed a 0.1 per cent increase, leaving it short of 6,750. That’s not even a month high for the UK index.”