Dire US GDP Results Fail To Hold Back The Markets

Lisa Smith, BA (Hons), CeFA
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Markets are still on the front foot despite the US released the worst GDP figures since the 2008 financial crash.

The economy in America has shrunk by 4.8% in the first three months of the year but traders expect President Donald Trump to pump billions more dollars into helping businesses through the coronavirus crisis.

The figures also signalled a larger plunge is on the way with second quarter figures that will include lockdown data from the start of April onwards.

And they were further buoyed by news that clinical trials into the possible virus vaccine remdesivir are providing more positive results leading to shares in the maker Gilead Sciences being halted.

Lockdown and vaccine hopes boost FTSE

The company has revealed that independent trials show the drug may relieve COVID-19 and could soon obtain official approval for wider trials.

As the news filtered through, the FTSE 100 in London burst through the 6000-point ceiling to end at 6115.25 – a rise of 2,63% that saw the index back at levels last seen at the start of March.

The FTSE 250 rallied too, climbing 3.34% to close the day at 16835.34.

The Pound had made mixed progress, rising 0.05% against the US Dollar, valuing Sterling at $1.2432, but weakened against the euro, down 0.29% to €1.1451.

Oil had another good day, with a barrel of Brent crude closing at 8.55% up to $22.21 and West Texas Intermediate reaching $15.50 a barrel, an increase of 25.61%.

Nikkei is day’s only grim performance

Gold was treading water and dropped 0.53% to $1708.10 an ounce.

Further afield, midday trading in the States saw the Dow Jones push on 2.7% to 24751.23, while the NASDAQ surged 3.58% to 8915.83 and the S&P 500 hit 2950.12 with a 3.03% increase.

European markets ended the day in the black. In Paris, the CAC 40 was 2.22% up at 4671.11, in Frankfurt, the DAX rode the day out with a 2.89% rise to 11107.74, the Euro Stoxx managed a 2.18% climb to 2996.08 and the IBEX in Madrid bested the rest closing at 7055.70.

Overnight, the Hang Seng in Hong Kong nudged up 0.28% to 32720.16 and Tokyo’s Nikkei lost ground, sinking 0.06% to 19771.9.

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