Coronavirus: Stock markets rally for second day as $2trn US stimulus revealed

Wednesday 25th March 2020 20:15 GMT

TThe Dow Jones Industrial Average had its best session, in percentage terms, since 1933 on Tuesday while the FTSE 100 gained the most in a day for 12 years as evidence mounted a deal had been done pending crucial Congressional votes.

The package, agreed by Senate leaders late on Tuesday, is understood to include direct payments to US households and aid for small businesses, the travel industry, hospitals and local government as the country gradually shuts down to fight COVID-19.

Wednesday began with Asian stocks following the US and European lead in making big strides - with Japan's Nikkei rising by 8% while Hong Kong was almost 4% up.

The FTSE in London surged as much as 5.4% higher but later fell back into the red as volatility returned. It was 4.5% up at 5,688 by the close - but still 25% down in the year to date.

The Dow Jones Industrial Average was more than 5% higher just before the close in New York but suddenly lost ground sharply amid reports that language in the record relief package was being challenged by Democrats at the last minute.

Sky's sister channel CNBC reported that American citizens could expect to receive cheques worth $1,200 - with a married couple getting up to $2,400 - under details to be published.

US students would be spared loan repayments until October, it said.

The index ended Wednesday's session 2.4% up.

Developments in the UK:

  • The big banks have been sent a letter from the Chancellor, governor of the Bank of England and head of the Financial Conduct Authority which urges them to ensure viable businesses ahead of the crisis remain so.
  • Barclays UK said it was to help consumers by automatically waiving interest on overdrafts for personal banking customers from 27 March to the end of April.
  • Chancellor Rishi Sunak has added estate agents, lettings agencies and bingo halls to the retail and hospitality firms exempted from business rates in the current financial year.
  • The Institute for Fiscal Studies has suggested there is scope to help businesses ride out the storm by delaying the introduction of higher minimum wage rates that were due in April, citing improved welfare support on offer.
  • The core measure of inflation fell to 1.7% in February from 1.8% the previous month thanks to falling fuel and computer game prices.

There was also a further steady stream of companies warning of a coronavirus impact in updates to the City on Wednesday morning.

Bicycle-to-car products retailer Halfords said it was planning for a 25% collapse in sales in its next financial year, beginning in April.

It told shareholders the dividend was to be suspended as part of moves to save cash but said it was confident it could operate within its current debt facilities.

Housebuilder Bellway said its half-year dividend was to be delayed and it would suspend purchases of new land.

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As the PM faces pressure to intensify the current lockdown regulations amid anger from builders, the company confirmed it was currently continuing to operate - in line with the guidance - but would close sites by the end of the week amid the need to keep people safe and as building supplies dried up.

Persimmon said it was also starting an "orderly shutdown" of its construction sites.

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