London hits pre-Covid peak, S&P strikes record high

·3-min read
First-time claims for US unemployment benefits unexpectedly rose last week, but investors brushed off the news, as it will likely encourage the Federal Reserve to keep interest rates low for longer

World stocks mostly rose Thursday, with London striking its highest level since before the pandemic and the S&P setting a new record as traders grew optimistic after the Federal Reserve underlined its commitment to record-low interest rates.

London's benchmark FTSE 100 index surged to 6,942.22 points at the close of trading, the highest intra-day level in more than a year.

In the eurozone, Paris and Frankfurt also advanced.

"The FTSE 100 hit its best level since the pandemic struck because there is growing confidence in the global and UK economic recovery," analysts Neil Wilson told AFP.

Wall Street indices also advanced, led by the Nasdaq, which jumped one percent and the S&P 500, which ended at a second straight all-time high.

Asian markets mostly rose as traders also took heart from Fed meeting minutes released Wednesday that reinforced its intention to keep borrowing costs at record lows for an extended period.

"Optimism surrounding the global economic recovery, supported by an accommodative Federal Reserve, lifted European stocks," said OANDA analyst Sophie Griffiths.

"The minutes from the March (Fed) meeting didn't reveal anything new, but a reiteration of the Fed's supportive stance appears to have been a tonic for the markets."

Wilson said that "the Fed's commitment to keeping short end rates down at a time of massive fiscal expansion means the path of least resistance for equities is up."

- Bad news is good news -

The Labor Department reported 744,000 new jobless claims, seasonally adjusted, in the week ended April 3, an increase of 16,000 from the previous week's upwardly-revised level.

Though a negative sign for the economy, the disappointing labor figures "will convince the Fed that it needs to be patient before removing policy accommodation," analyst Patrick O'Hare said.

Traders also kept tabs on the progress of US President Joe Biden's huge infrastructure plan.

Karl Haeling of LBBW said investors were also pleased by statements from President Joe Biden indicating willingness to compromise on his proposed hike in the corporate tax.

- Positive outlook -

For now, traders are happy to ride the rally as coronavirus vaccination programs progress, allowing economies to gradually reopen -- even if a little slower in some areas than others.

"The short-term momentum appears to remain in favor of the bulls as investors seem happy and willing to bet on an economic rebound over the coming months in light of the robust data," said Axi strategist Stephen Innes.

"And on top of all that, equity volatility continued to remain tepid (and) around its lowest levels since the pandemic began, encouraging risk-taking."

- Key figures around 2050 GMT -

New York - Dow: UP 0.2 percent at 33,503.57 (close)

New York - S&P 500: UP 0.4 percent at 4,097.17 (close)

New York - Nasdaq: UP 1.0 percent at 13,829.31 (close)

London - FTSE 100: UP 0.8 percent at 6,942.22 (close)

Paris - CAC 40: UP 0.6 percent at 6,165.72 (close)

Frankfurt - DAX 30: UP 0.2 percent at 15,202.68 (close)

EURO STOXX 50: UP 0.5 percent at 3,977.83 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 29,708.98 (close)

Hong Kong - Hang Seng Index: UP 1.2 percent at 29,008.07 (close)

Shanghai - Composite: UP 0.1 percent at 3,482.55 (close)

Euro/dollar: UP at $1.1915 from $1.1868 at 2100 GMT

Pound/dollar: DOWN at $1.3735 from $1.3737

Euro/pound: UP at 86.75 pence from 86.39 pence

Dollar/yen: DOWN at 109.26 yen from 109.85 yen

West Texas Intermediate: DOWN 0.3 percent at $59.60 per barrel

Brent North Sea crude: UP less than 0.1 percent at $63.20 per barrel