Markets continue to rebound after action by China and Japan

Markets continue to rebound after action by China and Japan

Markets continued their bounce back today rallying for the third session in a row spurred on by economy-boosting measures in China and Japan.

The top flight surged 1.4% or 83 points to 6229, following Tuesday’s 72 point gain, with the promise of fresh stimulus efforts sending markets across Asia and Europe sharply higher.

But the market eased back from being over 100 points ahead earlier in the session.

Germany’s Dax jumped 1.8%, while France’s Cac 40 rose 0.5%. In New York the Dow Jones Industrial Average edged up in early trading.

Japan’s Nikkei 225 index posted its biggest once-day gain since October 2008, leaping 8% higher overnight after Prime Minister Shinzo Abe raised expectations of more measures to shore up the country’s economy.

The Ministry of Finance in Beijing also pledged to strengthen fiscal policy, increase infrastructure spending and speed up tax reforms to support the economy, helping China’s Shanghai Composite Index rise 2.3%.

Market experts said the gains raised hopes that the recent sell-off may have bottomed out after equities have endured heightened volatility on fears over China’s slowing economy and US interest rate hikes.

The Footsie’s gains also came despite worse-than-expected official figures on the UK manufacturing sector and trade data showing exports falling to their lowest level in four years.

The pound slipped against the US dollar following the poor economic data, to just under 1.54. Sterling was slightly up against the euro, at just under 1.38.

In London, miners were among those leading the rally on hopes of increased demand as China bolsters its economic support, with Anglo American a strong performer with a rise of more than 5% or 39p to 742.9p, also helped by news of a deal to sell its platinum operations in South Africa.

Financial stocks were likewise among those benefiting from the rebound, in particular those with a heavy focus on Asia, such as insurer Prudential, up 3% or 42.5p to 1428p.

Luxury fashion group Burberry, which sees China account for a large chunk of its revenues, was another strong riser, up 18p to 1398p.

Financial services firm Hargreaves Lansdown was the biggest riser in the top flight up by 7%, or 78p to 1193p, despite seeing annual profits edge 5% lower to £199 million.

It blamed “known headwinds”, but said these would be less pronounced over the new financial year and said it intends to return to “healthy profits growth”.

It also reported annual assets under management rising to £55.2 billion from £46.9 billion the year before.

Elsewhere, Ryanair rose 5% or 69 cents (50p) to 13.61 euros (989p) after hiking its profit guidance by 25% thanks to more holidaymakers jetting off to escape the wet summer weather and take advantage of the strong pound.

The biggest risers in the FTSE 100 Index were Hargreaves Lansdown up 78p at 1193p, Anglo American up 39p at 742.9p, Glencore up 6.6p at 144.2p and BHP Billiton up 40p at 1127p.

The biggest fallers in the FTSE 100 Index were GlaxoSmithKline down 16.5p at 1312.5p, Mondi down 15p at 1472p, Randgold Resources down 34p at 3719p and ARM Holdings down 7p at 952.5p.

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