London markets rise by 2.1% with FTSE 100 opening 124 points up at 6,084 after Bank of England’s emergency cut in interest rates to combat coronavirus
- FTSE 100 index of Britain’s biggest firms up 124 points or 2.1% to 6,084 today
- It comes after Bank of England base rate was cut from to 0.25% from 0.75%
- New Chancellor Rishi Sunak’s first Budget will see him pledge to fight fallout
- FTSE 100 reacted like a see-saw yesterday following the new ‘Black Monday’
Share prices rose today after the Bank of England unexpectedly cut interest rates to shield the economy from the impact of the coronavirus outbreak.
The FTSE 100 index of Britain’s biggest firms rose 124 points or 2.1 per cent to 6,084 at the open today after the rate was cut from to 0.25 per cent from 0.75 per cent.
It comes ahead of the unveiling of new Chancellor Rishi Sunak’s first Budget in which he will pledge billions of pounds to fight the fall-out from the infection.
THIS WEEK: The FTSE 100 index of Britain’s biggest companies suffered a dramatic fall on what is being billed the new ‘Black Monday’, before see-sawing yesterday, then rising this morning
PAST THREE WEEKS: The FTSE 100 has tumbled since coronavirus fears first gripped traders
The Treasury said hundreds of billions of pounds will also be pledged today to invest in infrastructure including roads, railways, broadband and housing.
The rise this morning follows the FTSE 100 reacting like a see-saw yesterday following its biggest one-day loss since the financial crisis on Black Monday.
The index’s anaemic 0.09 per cent drop revealed little of a topsy-turvy day which at one point saw the FTSE claw back some of Monday’s losses.
At just before 11am yesterday, the index reached as much as 6,231.06, a 4.4 per cent or 265.29 point rise – but it was downhill from there until the late afternoon.
The initial rise came as traders were buoyed by news that US President Donald Trump could cut taxes to help with the effect the infection will have on the economy.
A quotation board displays the share price numbers of the Tokyo Stock Exchange today
The Bank of England said the decision to cut rates came following the spread of Covid-19, which has seen stock markets and shares plunge around the world.
It said its role is to help UK businesses and households through an economic shock from the virus ‘that could prove sharp and large, but should be temporary’.
The announcement this morning marked the first rate cut since August 2016 and the first unplanned rates decision since the 2008 financial crisis.
Stocks dropped in Asia today despite gains on Wall Street on hopes the Trump administration will act to cushion the economic pain of the virus outbreak.
Japan’s Nikkei 225 lost 2.2 per cent to 19,427.38. Australia’s S&P/ASX 200 plunged 3.6 per cent to 5,725.90 and South Korea’s Kospi shed 2.9 per cent to 1,905.50.
Pedestrians and cyclist wear face masks as they pass in front of a data board in Tokyo today
Chinese shares erased morning gains. Hong Kong’s Hang Seng fell 0.6 per cent to 25,238.08, while the Shanghai Composite dipped 0.5 per cent to 2,980.50.
Countries are shifting into damage-control mode as infections spread, prompting sweeping controls on travel and other public activities.
In mainland China, where the virus first took hold in December 2019, more than 80,000 people have been diagnosed and more than 58,000 have so far recovered.
But because the virus is new, experts are unsure how far it will spread, which has worried investors over a worst-case scenario for corporate profits and the economy.