London stocks rebound from worst day since 1987 crashReuters | Updated: 13-03-2020 15:46 IST | Created: 13-03-2020 15:46 IST
London stocks rose on Friday as a recovery in oil prices and moves by policymakers to limit the economic hit from the coronavirus helped them rebound from their worst selloff since the 1987 "Black Monday" crash a day earlier.
The blue-chip FTSE 100 rose 3.2%, but was still on course to post its worst week since the global financial crisis in 2008. Helping the slight move up on Friday were miners, supermarket chains and oil & gas producers.
"It was perhaps inevitable, given that the FTSE suffered its second worst session ever yesterday and it's probably some people deciding to buy at those lows," said Connor Campbell, analyst at financial spread better Spreadex. Global equities were hammered on Thursday after U.S. President Donald Trump shocked investors with a move to restrict travel from Europe, with the ECB's decision to hold off on interest rate cuts adding to panic about a liquidity crunch.
Emergency actions including the Bank of England's 50 basis point interest rate cut and the UK government's 30 billion-pound ($39 billion) stimulus plan have also failed to reassure investors about economic growth. Traders are now hoping that U.S. lawmakers and the White House will agree on a stimulus package, expected to be announced on Friday.
Travel stocks continued to be the worst hit, with Carnival Corp tumbling 7.9% to its lowest level since 2009 after its unit, Princess Cruises, said it would suspend the voyages of all its 18 ships for two months. Shares in holiday company TUI dropped 9.5%, while travel group Saga fell 3.9% after suspending its cruise operations until early May in response to the coronavirus crisis.
The domestically focussed FTSE mid-cap index was up just 0.5%. Oil producer Premier Oil surged 56.1% and was on course for its best day in over four years, after eyeing at least $100 million in potential savings on its annual capital spending plans to adjust to the plunge in global crude price.
BP Plc and Royal Dutch Shell Plc rose between 6% and 7%, tracking higher oil prices. Miners Rio Tinto, BHP group and Anglo American jumped more than 6% and were the top gainers on the main index.