London close: Markets finish higher on hopes of Trump stimulus

London stocks finished well above the waterline on Tuesday despite weak UK jobs data, amid reports US President Donald Trump is considering a $1trn infrastructure package and after the Federal Reserve launched a corporate bond-buying programme.

The FTSE 100 ended the session up 2.94% at 6,242.79, and the FTSE 250 was 2.2% at 17,464.70.

Sterling was mixed against its major trading pairs, last declining 0.17% against the dollar to $1.2583, but gaining 0.39% on the euro to €1.1173.

“The bullish sentiment is largely being fuelled by the belief the Trump administration is looking to set aside an extra $1trn for infrastructure spending,” said David Madden, market analyst at CMC Markets UK.

“The scheme would see funds being poured into roads, rail and 5G.”

Madden said the chatter of the stimulus package came less than one day after the Fed announced they would start purchasing individual corporate bonds, so today the bulls were “firmly in control”.

“The number of new Covid-19 cases as a result of economies being reopened is still an issue, but for now it has taken a back seat to the talk of Trump’s infrastructure plans.”

On home shores, the latest figures from the Office for National Statistics showed the number of hours worked in the UK fell at a record pace as an extra 6m people stayed off work during the Covid-19 crisis.

Total weekly hours in the three months to the end of April fell by 94.2m, or 8.9%, to 959.9m a year earlier.

The number of workers on payrolls dropped by more than 600,000 between March and May and job vacancies fell to a record low as the Covid-19 crisis continued to hit the labour market.

ONS figures indicated vacancies plunged 60% between March and May. Total pay fell in real terms for the first time since January 2018.

The unemployment rate surprised economists by holding steady at 3.9% versus an average forecast for an increase to 4.5%.

But experts warned the figures showed the government's furlough programme doing its job while delaying the long-term damage once state support for workers' wages ends in October.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the headline rate showed employment held "in suspended animation" by the government's job retention scheme.

“The true damage from Covid-19 will emerge in the autumn," he said.

In equity markets, travel stocks were in the green, with IAG up 5.86%, Carnival rising 7.58% and easyJet ahead 4.66%.

The sector rallied as travel company TUI, also up by 3.12%, said it plans to partially restart its summer 2020 programme.

Elsewhere, Ashtead rose 9.6% after the construction equipment hire firm said fourth-quarter profits had halved but paid a dividend despite the impact of the coronavirus pandemic.

Building materials company CRH was also up by 6.58%, with traders pointing to a potential boost from US infrastructure spending.

Outsourcer Capita racked up strong gains of 7.62% as it said it has been awarded a five-year, €10m contract by Irish Water for the transformation and operation of its customer contact centre services.

Cineworld rose 1.01% after saying it will reopen its UK and US cinemas on 10 July, with social distancing measures in place.

4imprint pushed 7.26% higher as it said orders had risen to almost half last year's amount as US states began lifting Covid-19 restrictions that had hit the promotional merchandise company's sales hard.

Greggs advanced 5.94% after saying it had frozen almost all shop openings and asked landlords for rent cuts as it set out plans to reopen about 800 stores for takeaway this week.

Market Movers

FTSE 100 (UKX) 6,242.79 2.94%
FTSE 250 (MCX) 17,464.70 2.20%
techMARK (TASX) 3,738.87 1.87%

FTSE 100 - Risers

Ashtead Group (AHT) 2,641.00p 9.60%
Ferguson (FERG) 6,526.00p 8.08%
Carnival (CCL) 1,355.00p 7.58%
Informa (INF) 497.30p 6.89%
CRH (CRH) 2,869.00p 6.58%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,654.00p 6.26%
International Consolidated Airlines Group SA (CDI) (IAG) 280.20p 5.86%
Barclays (BARC) 122.56p 5.56%
Melrose Industries (MRO) 122.20p 5.44%
Royal Bank of Scotland Group (RBS) 124.55p 5.33%

FTSE 100 - Fallers

Flutter Entertainment (FLTR) 10,550.00p -2.76%
Polymetal International (POLY) 1,466.00p -0.31%
M&G (MNG) 158.60p -0.06%
SEGRO (SGRO) 881.00p 0.11%
Admiral Group (ADM) 2,277.00p 0.26%
Fresnillo (FRES) 754.20p 0.88%
Spirax-Sarco Engineering (SPX) 9,814.00p 1.05%
ITV (ITV) 79.84p 1.17%
Intertek Group (ITRK) 5,332.00p 1.25%
Associated British Foods (ABF) 1,945.00p 1.46%

FTSE 250 - Risers

Hammerson (HMSO) 122.65p 9.56%
Wood Group (John) (WG.) 229.40p 8.77%
PureTech Health (PRTC) 257.50p 8.12%
Watches of Switzerland Group (WOSG) 280.00p 7.69%
Capita (CPI) 43.95p 7.62%
4Imprint Group (FOUR) 2,610.00p 7.26%
Elementis (ELM) 72.10p 6.96%
Aston Martin Lagonda Global Holdings (AML) 74.20p 6.38%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,654.00p 6.26%
Petrofac Ltd. (PFC) 212.30p 6.26%

FTSE 250 - Fallers

GVC Holdings (GVC) 719.40p -4.08%
Provident Financial (PFG) 197.60p -2.24%
Babcock International Group (BAB) 349.70p -2.15%
Safestore Holdings (SAFE) 703.50p -1.88%
Petropavlovsk (POG) 27.35p -1.26%
Spirent Communications (SPT) 235.50p -1.26%
Senior (SNR) 81.40p -1.21%
Bakkavor Group (BAKK) 79.20p -1.00%
Sabre Insurance Group (SBRE) 270.50p -0.92%
Foresight Solar Fund Limited (FSFL) 113.00p -0.88%