FTSE 100: Stock markets edge higher as hopes for global recovery grow
Public optimism rises sharply as vaccine rollout gathers momentum
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Your support makes all the difference.The FTSE 100 edged higher on Monday along with other major indices around the world as optimism grew that economic growth will speed up.
Europe's Stoxx 600 index rose a quarter of a per cent while the FTSE 100 eked out a 0.1 per cent increase to trade at 6,767.75. Germany’s DAX climbed 0.3 per cent to 14,546.95 and the CAC 40 in Paris added 0.5 per cent to 6,075.54
While markets were tentative, the public has grown much more optimistic about the economy. Ipsos MORI found that confidence about the outlook for the next 12 months has jumped by more than in any month since 1998.
Forty-three per cent of those polled think the UK economy will improve, up 14 points from last month.
The UK has suffered Europe’s highest coronavirus death toll but it has rolled out its vaccination programme more quickly than other countries.
The proportion of people who think the economy will get worse dropped to 41 per cent from 60 per cent last month while 14 per cent think it will stay the same.
Andrew Bailey, the governor of the Bank of England, issued his own upbeat assessment, stating that he believed a recovery to pre-pandemic levels will be achieved by the end of this year as restrictions are lifted.
Mr Bailey said he was more positive about the country's economic prospects and that the impact of restrictions appeared to be reducing over time.
However, he warned that uncertainty remained so any optimism should be treated with "a large dose of caution".
A recovery would be good news, Mr Bailey said, "but let's be realistic. It’s not more than getting back to where we were pre-Covid."
Markets got a mixed message from the data out of China, which has led the global recovery, reopening earlier than other countries from coronavirus shut-downs that emerged in the central city of Wuhan in early 2020.
Retail sales jumped nearly 36 per cent year-on-year in January-February from a year earlier. But the surge was mostly driven by strong demand for cars, catering and jewellery, suggesting Chinese consumers were splashing out during the Lunar New Year, ING economists said in a report.
The data were exaggerated by low base effects from the shutdowns last year, they said. Meanwhile, the jobless rate rose to 5.5 per cent from 5.2 per cent a year earlier, possibly affected by flare ups of coronavirus in some areas, analysts said.”
Travel restrictions weighed on retail sales but boosted industrial output and investment. We think activity will remain strong during the first half of this year, before giving way to a weaker second half,” Julian Evans-Pritchard of Capital Economics said in a commentary.“
Domestic policy support is being gradually withdrawn. And foreign demand for Chinese goods will drop back as vaccines start to reverse the recent shift in global consumption patterns,” he said.
The Shanghai Composite index fell 1 per cent to 3,419.95. Tokyo’s Nikkei 225 index edged 0.2 per cent higher, to 29,766.97 and the Hang Seng in Hong Kong climbed 0.3 per cent to 28,833.76. In South Korea, the Kospi lost 0.3 per cent to 3,045.71. Sydney’s S&P/ASX 200 inched 0.1 per cent higher, to 6,773.00.
Additional reporting by AP
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