British mid-caps gain as investors hope for post-pandemic recoveryReuters | Updated: 01-07-2020 14:09 IST | Created: 01-07-2020 14:09 IST
London's mid-cap index ticked up on Wednesday as investors clung to hopes of fresh stimulus and a pickup in economic activity in the second half of the year, shrugging off concerns about more possible lockdowns following a surge in COVID-19 cases. The domestically focussed FTSE 250 was up 0.4% after closing Tuesday with its best quarter in eight years, partly on the back of historic global monetary and fiscal stimulus. Early gains were led by the auto, energy and retail sectors.
The export-heavy FTSE 100 was flat, tracking weakness in Asian stocks following the spike in COVID-19 cases. "The direction of improving economic numbers is leading (investors) to believe the economy isn't dead yet," said Andrea Cicione, strategist at TS Lombard.
"An increase in consumer confidence, led by stimulus measures and cheap market valuations, is the base on which investors are betting towards markets expanding ahead." The FTSE 100 has rallied about 25% and the FTSE 250 about 39% since crashing to multi-year lows in March, powered by hopes of a swift revival in economic activity following the easing of the coronavirus-induced lockdown.
Bank of England chief economist Andy Haldane said on Tuesday recent signs suggested Britain was on course for a V-shaped recovery, although he warned of risks of high and persistent unemployment. Data on Wednesday showed the downturn in euro zone manufacturing in June was not as bad as initially feared, while UK figures confirmed that manufacturing activity expanded slightly last month.
Upper Crust owner SSP dropped 2.4% after saying it could cut about 5,000 jobs in a proposed restructuring of its UK business. Mall operator Hammerson jumped 4.4% as it said it had received approval for the issuance of up to 300 million pounds ($371.31 million) under the government's Covid Corporate Financing Facility (CCFF), bumping up its maximum liquidity to 1.5 billion pounds.