- Anglo American miner jumps on solid production data
- EasyJet says it will fly 60% of its pre-pandemic capacity
- Leading economist says cutting stimulus support early is not fair
- FTSE 100 up 1.0%, FTSE 250 up 0.7%
July 20 (Reuters) – Commodities and bank stocks helped the FTSE 100 rebound on Tuesday after an increase in coronavirus cases and fears of an economic slowdown pushed the index to a two-month low during the previous session.
The FTSE 100 (.FTSE) gained 1% with HSBC Holdings (HSBA.L), BP (BP.L) and Rio Tinto (RIO.L) being the main boosts. The base metal miners sub-index (.FTNMX551020) was the top gainer, up 1.8%.
Banks (.FTNMX301010) jumped 1.3% after Catherine Mann, a leading economist soon to join the Bank of England’s rate-setting committee, joined interest rate fixer Jonathan Haskel to argue that cutting stimulus support too soon was not the right option. Read more
A recent surge in inflation above the BoE’s 2% target since May had raised concerns that central bank support would be withdrawn earlier than expected.
Two BoE monetary policy members said last week that the time may be nigh for the BoE to put the brakes on its massive stimulus package.
“Another potential economic downturn from the virus, now combined with soaring inflation, can be a big headache for policymakers,” said Charalambos Pissouros, head of research at JFD Group.
“It will be difficult to keep planning for hikes in case the economy gets hit again, when… you can’t ignore inflation if it continues to soar well above your target.”
The Internally Focused Midcap Index (.FTMC) rose 0.7%.
Among stocks, global mining company Anglo American (AAL.L) jumped 1.5% after saying its production rose 20% in the second quarter, driven by strong diamond and platinum production. Read more
EasyJet (EZJ.L) gained 1.7% after the UK airline said it would fly at 60% capacity ahead of the July-September pandemic, a huge jump from the 17% it had stolen in the previous quarter. Read more
In trading activity, US group Apollo Global Management (APO.N) said it would not pursue a solo bid for UK supermarket chain Morrisons (MRW.L) and was in talks to join the consortium. led by Fortress Investment Group. Read more
Reporting by Shashank Nayar in Bangalore; Editing by Subhranshu Sahu and Shailesh Kuber
Our standards: Thomson Reuters Trust Principles.