RE: Short selling13 Mar 2020 11:18
10.45am: After a pause for breath, blue-chips kick on again
The rally is back on as investors take heart from improved Chinese coronavirus data and action by the People’s Bank of China to boost liquidity.
The FTSE 100 is up 251 points (4.8%) at 5,489 with British Airways owner International Consolidated Airlines (LON:IAG), up 11.0%, leading the way.
Stocks closely attuned to the health of the Chinese economy, such as steel maker Evraz PLC (LON:EVR) and miner BHP Group PLC (LON:BHP), both up 11%, are proving more popular than ice cream on a hot day.
China’s central bank will implement targeted reserve requirement ratio cuts for some financial institutions on next Monday, releasing 550bln renminbi in long term funds.
The move follows a pledge earlier today by the Bank of Japan to also boost liquidity in markets.
“With China over the worst of this crisis, we are seeing investors scoop up mining names that have been heavily hit; however, it is likely to get worse before it will get better, with lockdowns like those in Wuhan and Italy likely to take shape in countries such as Spain, France, and Germany before long,” predicted IG’s Joshua Mahony.
So far, no heavyweight company has given any indication it is worried about going bust but BT Group PLC (LON:BT.A) has revealed that its chief executive, Philip Jansen, has tested posititve for COVID-19.
BT’s shares were up 5.9% so the market did not seem unduly worried.