The ECB meeting has helped investors maintain an optimistic outlook, but the FTSE 100 has struggled thanks to losses for oil and mining names.
It hasn’t been much of a day for two-way market movement, with the buyers firmly in charge for a third consecutive session. The ECB duly delivered a dovish view, vowing to press on with negative rates in a bid to get inflation moving towards its modest 2% target, providing a support for European indices that show no sign of weakening despite two days of strong gains already this week. Central bank hawkishness, premature or otherwise, has been a bit of a go-to for market weakness, and investors will be pleased to see that one of the ‘big four’ is still committed to its loose monetary policy stance, even if the actual benefits from such a continued stance are limited. After flagging yesterday growth stocks have taken the lead on Wall Street, with the baton of leadership passed around most of the indices so far this week, another positive development in that this is not some passing rally that fails to energise the entire market.
The FTSE 100 provided one real point of weakness today, left out of the ECB-related excitement and without much in the way of tech to carry it higher. Again it is oil and mining stocks that have held it back, countering strong gains in a variety of other sectors and seeing it drop below 7000 once again. But given the overall encouraging backdrop for stocks we should see the index recover in due course, even if the outlook for the UK remains clouded by rising cases and an avalanche of ‘pings’ that threatens to undermine UK business just as it hopes to benefit from the nation’s re-opening.
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