Markets: FTSE 100 at fresh one-year high after Carney's 'big bazooka'

The Bank of England is expected to raise rates two more times over the next three years

(Image credit: Getty)

By The Week Staff

last updated 5 August 2016

Updated: 9.04am

The FTSE 100 is at a fresh one-year high and the FTSE 250 is back above its pre-referendum peak, after the Bank of England's "big bazooka"
Policy makers cut the base interest rate by 0.25 per cent, ramped up bond purchases by £70bn, and unveiled a £100bn lending scheme to boost lending and protect bank margins
Taken together - and especially given the innovative nature of the last element - it is a far more extensive package than most had expected
The pound slumped on the news, recovering only slightly this morning to $1.312
Benchmark index the FTSE 100 had risen 0.6 per cent after its first hour this morning, to 6,777
Miners are doing well, but Hilka Pharmaceutical is leading the way with a relatively modest 3.9 per cent rebound after a steep double-digit slump on Thursday
It's more domestically-focused cousin the FTSE 250 was up 0.8 per cent to 17,374
Sentiment remains fragile and more poor economic news could burst the bubble - but it is hoped that the Bank's action will help to avoid a full-blown recession and that the government will follow with fiscal stimulus
In Europe the German Dax was up 0.4 per cent and the French Cac 40 by 0.9 per cent
On Wall Street the S&P 500 closed marginally higher overnight, while in Asia later on the Hang Seng gained 1.6 per cent and the Japanese Nikkei ended flat
Gold is higher after the latest looening of monetary policy, at $1,361

It's Super Thursday again in the UK - and today's Bank of England's policy calls are seemingly being rated as quite "super" by traders
Interst rates were cut to a record low of 0.25 per cent and quantitative easing bond purchases were increased by £70bn, including for the first time £10bn of corporate bonds
There was also a new £100bn lending scheme announced that should boost small business lending and help to protect bank profit margins
Just how big Mark Carney's "bazooka" was going to drive the market trend today, as traders look for strong action to counter an economic slowdown
The FTSE 100 was marginally lower in early trading, but in the hours since the decision it has swung to a 1.5 per cent gain at 6,734
This suggest the action is seen as being more extensive than traders had generally expected
Aviva was leading the way with a 7.5 per cent rise after it upped its dividend after reporting strong life company profits. Standard Chartered was having another good day with a rise of 5.5 per cent
The more domestically-focused FTSE 250 was up 1.6 per cent to 17,264. Sterling was substantially lower at $1.3121
European shares were also higher, with the German Dax up 0.3 per cent and the French Cac 40 up 0.4 per cent, although both are down from earlier highs amid mixed eurozone economic data
Wall Street edged higher overnight, buoyed by a rise in oil prices. The S&P 500 added seven points to 2,164, but its more circumspect and essentially flat today
Overnight the Japanese Nikkei added one per cent, while the Hang Seng gained 0.5 per cent
Gold is up in the wake of the Bank of England decisions, as it tends to be when interest rates are lowered, to $1,361

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Global stocks are still on the wane from recent highs after a poor start to the week, amid economic worries and central bank disappointment
UK data has been particularly poor in the wake of the Brexit vote, with first manufacturing and then yesterday construction activity being recorded at a seven-year low
This morning an update on activity in the dominant services sector is published, which will heavily influence today's trend
In early trading the FTSE 100 has bounced around and at the end of its first hour it was down 0.1 per cent at 6,639
Housebuilders were leading the fallers as the fallout from the construction slump continues, with Persimmon, Taylor Wimpey, Barratt Developments and Berkeley Group all down between 1.7 and 2.4 per cent
The more domestically-focused FTSE 250 was down 0.7 per cent after a respected think-tank gave a 50:50 chance of a UK recession. The pound was down 0.4 per cent to $1.3246
Elsewhere the Bank of Japan disappointed investors last week and a fiscal package unveiled by Japan's government has also underwhelmed
The yen is near a three-year high and the Nikkei led Asian bourses lower overnight, shedding 1.9 per cent. In Hong Kong the Hang Seng ended down 1.6 per cent
Wall Street has been sliding since weak GDP growth data last week and the S&P 500 lost 0.6 per cent yesterday to 2,157
The risk-off mood is not helped by the slump in oil, which has fallen to new four-month lows, while gold is strong and steady at $1,362

European stocks are falling on Tuesday after a negative close on Monday, as weak economic data and worries in the banking sector hit sentiment
Manufacturing activity in the UK fell further than expected in July to a three-year low, while it also declined across the eurozone
Bank stress tests at the end of last week showed the sector in better health since the crisis, but there were localised areas of weakness that have prompted a liberal sell-off
The FTSE 100 closed down 0.4 per cent yesterday - and was 0.5 per cent lower this afternoon to 6,659
Barclays and RBS are among the leading fallers with declines of 2.9 and 1.5 per cent, after being singled out in the stress tests
The FTSE 250 was down 0.2 per cent, while the pound has recovered ground and was up one per cent to $1.3311 after a slump on Monday
Across Europe the German Dax and the French Cac 40 were both down by 1.7 per cent
On Wall Street the S&P 500 is coming off its strong run and is down 0.8 per cent from near its recent all-time high, despite strong data on consumer spending this afternoon
In Asia the Japense Nikkei lost 1.5 per cent as the yen resumed its rise, even as markets awaited news of a major stimulus package from the government
Oil remains weak and Brent crude is below $42.50 a barrel, while US benchmark West Texas Intermediate fell below $40 overnight
Gold is still relatively strong amid the 'lower for longer' rates environment, up 0.9 per cent at $1,363 an ounce

UK benchmark the FTSE 100 had started off the week in upbeat mood and this morning returned to its recent 11-month high above 6,750
Markets are generally benefitting from trader bets on central bank largesse continuing - and in the UK a positive economic survey this morning suggested the UK will avoid recession
But since then an updated survey of manufacturing managers has pointed to an even bigger post-Brexit vote slowdown than previously thought, adding to fears of a major economic hit
The FTSE 100 turned negative and at around 1pm was sitting on a loss of 0.3 per cent to 6,706
House builders, which are in the crosshairs of any slump, are struggling and both Taylor Wimpey and Berkeley Group are among the top fallers
The more domestically-focused FTSE 250 was also down 0.3 per cent and the pound was down 0.4 per cent at $1.3172
Preventing even deeper falls was the sense that the Bank of England will inject more stimulus on Thursday
Central bank policy is also supporting wider risk sentiment. In the US a poor set of growth data has apparently ended the chances of a September rates rise, which could spur the S&P 500 to a new record high later
In Europe the German Dax is flatand the French Cac 40 down by 0.6 per cent, after the eurozone also reported poor manufacturing activity
In Asia the Japanese Nikkei added 0.4 per cent after a slip in the value of the yen, while the Hong Kong Hang Seng gained 1.2 per cent as Chinese PMI data showed a dip in industrial output but growth in the services sector
Gold is down a little at $1,346 an ounce, while oil was slipping again this morning and Brent crude is back below $43 a barrel

It was the second major central bank decision of the week last night, as the Bank of Japan took centre stage - and sent markets into a spin
More stimulus was, as expected, announced, but the Financial Times says it underwhelmed some traders and stopped short of a so-called 'helicopter money' distribution to boost inflation
The yen surged, which normally spells bad news for the export-sensitive Nikkei, and bond yields rose as prices slumped
But eventually the Nikkei recovered and closed up 0.6 per cent, as more central bank bond buying emphasised how accommodative monetary policy is in reality
More strong corporate earnings in the US also boosted sentiment, as Google and Amazon reported huge profit surges after Wall Street closed
This is also helping to hold the S&P 500 up after its re-opening this afternoon, even despite weaker-than-expected second quarter economic growth figures that at 1.2 per cent were less than half consensus estimates
The S&P 500 finished slightly higher at 2,170 last night. After a brief dip it has recovered this level this afternoon and is just eight points below Monday's record close
Back home the FTSE 100 started out marginally lower but has actually recovered to trade mostly sideaways, at 6,723
It was being led higher by Barclays, which had gained in excess of six per cent. The bank reported a fall in underlying profit, but it crucially remained in positive territory and core divisions did well
The FTSE 250 had also recovered a to madest gain at 17,266, and the pound was up 0.2 per cent to $3.183
In Europe the German Dax was up 0.2 per cent and the French Cac 40 was down by 0.2 per cent
Gold was rising at $1,343 as the prospect of a US rates rise appeared more distant, while the oil price continues to weigh on risk sentiment, with Brent crude slipping below $42

The FTSE 100 is mixed on Thursday morning, as it searches for direction after a wild ride on Wednesday
At one point during yesterday's session the index hit a one-year high, in the wake of data showing the UK economy picked up pace in the lead up to the Brexit vote
But the data is considered by some a "last hurrah" and surveys this morning show softening in keys sectors like construction and car making
This gives traders a dilemma: they like the idea of a rates cut or other monetary stimulus that the poor data might prompt, but there is also a mood of caution given the wider economic headwinds
After dipping back to a more modest postive close yesterday afternoon, this morning the UK benchmark was essentially flat at 6,746
Rolls Royce was the biggest mover, adding nearly eight per cent after it announced more management job cuts and forecast a profit recovery in the second half of 2016
The smaller-cap FTSE 250 surpassed its pre-Brexit vote peak and was up 0.4 per cent this morning to 17,341. The pound was flat at $1.3211
Adding to the mixed mood was a sideways trend on Wall Street overnight, after the Federal Reserve held rates but hinted it could increase them again in September
Having lost less than three points, it is projected to regain the modest loss later today after strong results from Facebook
In wider Europe the Germand Dax was up 0.4 per cent this morning and the French Cac 40 by 0.5 per cent. In Asia overnight the Japanese Nikkei lost most of its Tuesday gains after the yen gained ground
The oil price was dipping again on more bearish supply data, with Brent crude below $44 a barrel. The gold price was up to $1,340 an ounce

Japan set the tone for global markets overnight, as its main benchmark the Nikkei surged 1.7 per cent
The main driver of that increase was the announcement that the Japanese government will next week unveil a major stimulus package to boost the economy
On Friday the Bank of Japan meets and is expected to make it a one-two of stimulus measures with a monetary policy boost
Technology firms across Japan and asia were also buoyant after Apple reported better-than-expected sales after the closing bell in New York
The S&P 500 had settled mostly flat in part in anticipation of the results and futures indicate it will open up at 2,174 this afternoon, close to Monday's record high
Wall Street is still relatively cautious ahead of the US's own major policy meeting of Federal Reserve rate setters, starting today
In the UK the FTSE 100 was up 0.3 per cent to 6,746 after the first hour, close to its 11-month high on Monday
It was being led higher by ITV, which was up 5.5 per cent after reporting rising profits. But growth figures for the quarter leading up to the Brexit will be important if this rally is to be maintained
The FTSE 250 was up 0.4 per cent and the pound is holding relatively firm at a little above $1.31
In wider Europe, the German Dax was up 0.6 per cent and the French Cac 40 by a full one per cent. The pan-European Stoxx 600 was up 0.5 per cent
Oil is firmer but still subdued, with Brent crude at less than $45 a barrel, while gold was mostly unchanged at $1,321 an ounce

Markets remain mixed on Tuesday, as post-Brexit vote uncertainty is set to come to smething of a head in the coming days
The S&P 500 fell seven points to 2,168 last night, a slide the FT ascribes to a pessimistic mood ahead of Apple's quarterly results due after the closing bell today
Since re-opening today the US benchmark has edged up 0.1 per cent
Traders are also eyeing meetings of the US Federal Reserve and the Bank of Japan this week, as well as the results of eurozone bank stress tests on Friday
Adding to the risk-off mood is a fall in the price of oil, which continues to slide and is below $45 a barrel on oversupply concerns
In the UK the main benchmark, the FTSE 100, was up 0.2 per cent heading towards the last half hour to 6,723, recovering slightly after a late slump into the close on Monday
BT is among the top risers with an advance of four per cent, after Ofcom stopped short of demanding that its profitable infrastructure arm, Openreach, is sold off to boost competition
Elsewhere the FTSE 250 was down 0.1 per cent, while the pound was down 0.1 per cent to $1.3125, although this is up from an earlier low
Across Europe the German Dax was 0.5 per cent higher and the French Cac 40 was up 0.1 per cent. In Asia overnight the Japanese Nikkei lost 1.4 per cent after the yen's latest advance
Gold is down slightly to $1,319 an ounce as equities remain near recent highs

Trading is cautious on Monday, ahead of a week that the FT notes is "chock full of risk events"
On Friday the FTSE 100 had closed at a new 11-month high, while across the pond the S&P 500 hit another new all-time high
Traders have been brushing off post-Brexit vote concerns amid a strong corporate earnings season in the US and as central banks appear poised to inject even more stimulus to bolster growth
This week 200 of the S&P 500 will report quarterly results, and the Federal Reserve and Bank of Japan will announce latest policy decisions on Wednesday and Friday respectively
Adding to the "wait-and-see" mood in Europe is the fact the result of bank stress tests in the eurozone are also due on Friday
This morning the FTSE 100 was up 0.1 per cent at the end of the first hour
Among the top risers, two housebuilders were tentatively rallying - Taylor Wimpey and Barratt Develpments had risen 1.2 and 0.6 per cent
BT was also up, by 1.2 per cent, as reports suggested Ofcom will not force a formal split from Broadband arm Openreach
The FTSE 250 was up 0.3 per cent, while sterling had risen slightly from its Friday low to $1.3133. The pound had slumped amid the latest speculation of an imminent rates cut
Across Europe the German Dax was up 0.1 per cent, while the French Cac 40 was up 0.2 per cent
In Asia overnight key benchmarks moved mostly sideways, with the Hong Kong Hang Seng losing 0.1 per cent and the Japanese Nikkei ending virtually unchanged
Both gold and oil are lower, with the yellow metal down 0.5 per cent at $1,316 an ounce and oil languishing at a new two-month low around $45.50 a barrel

Markets are ending the week in mixed, after the European Central Bank on Thursday reset expectations for central bank largesse
But rates cut hopes are rising in the UK in the wake of dire "flash" survey data on the economy, which has pointed to a sharp downturn in sentiment in the wake of the Brexit vote
The FTSE 100 was up 0.4 per cent heading towards the last half hour, as traders are now certain the Bank of England will inject further stimulus in August
On the other hand, the FTSE 250, which is more domestically-focused, is down 0.4 per cent and the pound is down one per cent to $1.30
Overnight the S&P pulled back 0.4 per cent to 2,165, after quarterly results from the likes of Intel and Starbucks disappointed. Results from General Electric have come in above expectations on Friday, however.
In all more than six in ten firms in this earnings season have surprised on the upside, close to a record, and the index is up 0.2 per cent and near its recent all-time high
In Europe stocks ended Thursday in mixed fashion, after the ECB stood pat on rates and president Mario Draghi insisted Brexit fears were 'overblown', suggesting it may not inject more stimulus in September either
Across Europe the Dax in Germany and Cac 40 in France are both almost flat, as tradewr balance this more hawkish view with data showing Europe has proven so far to be insulated from the Brexit fallout
In Asia the Japanese Nikkei lost 1.1 after the yen gained ground
Gold has slipped a little today to $1,320 an ounce, while Brent crude oil is down below $46 after recent inventory data

European stocks are easing back slightly from recent highs this morning, reflecting a bit of consolidation ahead of an ECB update later today
The Financial Times says most are not expecting any change to underlying policy, but in the first meeting since the Brexit vote investors are looking for signs that more stimulus may be on the way
Central bank largesse has been driving equities sentiment of late and more loosening is expecting in the UK and Japan soon
The FTSE 100 closed at a new 11-month high above 6,731 yesterday and was down 0.3 per cent this morning to 6,707
Leading the losers is EasyJet, which has shed close to five per cent after reporting a drop in profits, not least because of the hit to the pound since the Brexit vote
The FTSE 250 was down 0.3 per cent to 16,968. Sterling was a little higher against the dollar to $1.325
Across Europe the German Dax was flat this morning, while the French Cac 40 is down 0.1 per cent
On Wall Street the S&P 500 hit another new record yesterday as a strong corporate earnings season rolled on, adding 0.4 per cent to 2,173
Futures suggest the benchmark index might hold that level when it re-opens later this afternoon, although it too is likely to be influenced by events at the ECB
Gold has continued to lose a bit of ground at $1,312 an ounce, while Brent crude oil has edged up a little to above $47 a barrel

Markets on both sides of the Atlantic are set to push on to new peaks today, amid more strong earnings in the states and an unexpected drop in unemployment at home
The S&P 500 is up six points to 2,170 in early trading, which would be a new all-time record high close if it holds
A strong earnings season is driving trends on Wall Street - and there have been analyst-beating updates from Microsoft and SAP today
Back home, the FTSE 100 was up 0.4 per cent to 6,726 and was on the up heading towards its final half hour. This would be another new 11-month high
There have been warnings on the UK economy from the likes of the IMF, but unemployment data out this morning showed the UK jobless rate fell to a new 11-year low in the March-May period
The more domestically-focused FTSE 250 was up one per cent, but it remains 1.5 per cent below its pre-referendum peak
Financials are doing well on the FTSE 100 today, with investment group St Jame's Place up 4.4 per cent and insurer Legal and General up 3.3 per cent
In Europe the German Dax was up 1.6 per cent, the French Cac 40 was up one per cent, and the Italian FTSE MIB was up just 0.5 per cent
Overnight in Asia stocks were mixed, with the Japanese Nikkei breaking a three-day winning streak and shedding 0.3 per cent, while the Hong Kong Hang Seng gained 0.8 per cent
Gold was down a little $1,319, while oil remains subdued ahead of latest inventory data, with Brent crude below $47 a barrel

Friday trading has been carried out amid a sombre note, in the wake of the latest tragedy in France believed to be another terrorist incident
Details surrounding the deaths of at least 84 people in tourist hotspot Nice are still emerging and are overshadowing the political and economic news that had been dominating the agenda for weeks
As is usual on such occasions, traders are selling out of holiday-related stocks such as airlines. Easyjet has been the biggest faller on the FTSE 100, shedding more than three per cent
Markets are not, though, selling off substantially and some declines that are around are a natural lull after a recent strong rally
The FTSE 100 was back in modestly positive territory heading into the last half hour, at 6,660
This came on the back of a volatile trading day yesterday after the Bank of England's shock decision not to cut interest rates. It eventually settled down 0.2 per cent
The pound rose above $1.34 at one point, but it has fallen back today and was 0.5 per cent down and below $1.33
Shares are still lower in France in early trading, by around 0.5 per cent. Elsewhere in Europe the German Dax and wider FTSE Eurofirst 300 were down just 0.1 and 0.2 per cent
Wall Street rose again overnight, on the back of recently strong economic data and well received results by JP Morgan that kicked off earnings season, with the S&P 500 hitting a new record of 2,164
It has edged higher again in early trading on Friday, up by 0.1 per cent
Asian stocks rose again during their Friday session, with the latest dip in the yen pushing the Nikkei in Japan up 0.7 per cent, and the Hong Kong Hang Seng up 0.6 per cent
Gold has regained a little ground since a fall in the wake of the rates hold, at $1,331 an ounce this morning
Oil is still lower after its weak supply data this week, but Brent crude has recovered and is heading back towards $48 a barrel

Markets were in positive mood on Thursday morning, ahead of a key Bank of England rates decision and the kick-off of the US earnings season
Mark Carney and his fellow rate-setters were expected to have cut rates to a new record low of 0.25 per cent and ramped up the bond-buying quantitative easing programme
Taken together, this should increase the supply and decrease the cost of funding, which is buoying trader sentiment
In the event, however, and despite strong hints the contrary, the Bank shocked markets by refusing to take action this month and instead offering guidance for potential loosening in August
The pound has surged 1.7 per cent and is closing in on $1.34 - and it coud go on to conclude its best week for seven years tomorrow
As for equities, the FTSE 100 swung wildly from an earlier rise in excess of one per cent into negative territory before recovering to sit 0.5 per cent up in early afternoon
Traders are seemingly happy with the underlying lack of panic being displayed by the Bank of England. The FTSE 250 is up 0.1 per cent
In the US, JP Morgan is to open what most expect to be a strong corporate earnings season amid a generally positive picture on the wider economy
The S&P 500 closed very marginally up at the end of Wednesday trading, setting another record high. Futures indicate it will open as much as 0.8 per cent higher again later this afternoon
In wider Europe the German Dax and the French Cac 40 are up 1.5 per cent, while the Italian MIB is up 1.6 per cent
A fall in the yen helped the Japanese Nikkei gain one per cent in Asian trading on Thursday, while the Hong Kong Hang Seng added 0.9 per cent
Gold is down as a result of borrowing costs being held firm, at $1,324, while oil is lower again after a disappointing reserves draw, with Brent crude at around $47 a barrel

UK stocks and the pound are up again on Wednesday, but trading is more circumspect and safe havens are back in demand
Markets have enjoyed a strong rally in the past two days ahead of the rapid appointment of Theresa May as prime minister today, ending political uncertainty
Sterling surged towards $1.33 against the dollar, the FTSE 100 was at an 11-month high of 6,700 and the S&P 500 was at a new record peak
The UK benchmark is 0.3 per cent higher today. Burberry was surging close to eight per cent after it revealed a boost to lacklustre earnings from the pound slump
On the other side of the equation housebuilder Berkeley Group had shed another three per cent, adding to heavy post-referendum losses
The FTSE 250 was up 0.1 per cent per cent to 16,824, while the pound was up slightly at $1,3260
Across Europe the German Dax was up 0.1 per cent per cent and the French Cac 40 was up 0.5 per cent. The Italian FTSE MIB was down one per cent as its banking sector crisis grows
Wall Street has been driving a more risk-on mood in the wake of consistently strong economic data and an accommodative monetary policy stance from the Federal Reserve
The S&P 500 hit a new record close yesterday of 2,152. It has edged up a single point in early trading this afternoon
Asian stocks mostly rose overnight, with the Japanese Nikkei gaining 0.8 per cent and the Hong Kong Hang Seng adding 0.4 per cent
Gold has gained some ground this morning after an overnight slump, returning to around $1,340. Oil is dipping after a rally yesterday afternoon as a report showed US reserves have increased, and is back below $47 a barrel

UK markets and the pound both surged on Monday, hitting a new 11-month high after the Tory leadership race reached an unexpectedly swift conclusion
Markets famously do not like uncertainty, so the appointment of Theresa May as prime minister on Wednesday should begin to offer more clarity on how Britain will approach Brexit
There is also a general sense that May is more of a pragmatist and that her appointment gives more hope of single market access
Helping sentiment in the UK and elsewhere was a record close on Wall Street last night - since extended this afternoon - as recently strong economic data, supportive central bank stances and a positive view of corporate earnings all contributed to an upbeat mood
The FTSE 100 was down only marginally at 6,675 heading into the final half an hour of trading, holding near the 11-month high hit yesterday
A more positive view on Brexit amid the political maneouverings has helped those stocks hit hard since the referendum result
Taylor Wimpey and Barratt Developments were both up around three per cent, helping to par some of the heavy losses incurred in the past two weeks. BA owner IAG and easyJet were also doing well, up around 4.5 per cent
The FTSE 250 was up 0.4 per cent, meaning it's just 3.5 per cent down since the referendum now. Sterling is up 1.3 per cent to above $1.316 against the dollar
In wider Europe the German Dax and French Cac 40 were up 1.3 and 1.5 per cent, while the Italian FTSE MIB was up almost three per cent
Last night the S&P 500 closed up 0.3 per cent at 2,137. It has extended that record settlement by 10 points to 2,147 this afternoon
A strong session in Asian overnight saw the Japanese Nikkei surge 2.6 per cent, following up a four per cent advance on Monday on further losses for the yen. The Hong Kong Hang Seng added 1.5 per cent
Gold has fallen back from its recent highs to $1,343 an ounce in the face of the wider equities rally. Oil is also recovering from a two-month low to back above $47 a barrel

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