The FTSE opened with a dip but then proceeded to recover helped with a strong performance from mining firms and oil majors. Copper, silver and other primary metals all picked up over the last 24 hours while Brent crude bounced back above $52. A surprise rate cut by the Federal Reserve late Tuesday also went some way to reassure markets.
Metal investors are beginning to take the long view that industrial production and demand in China will soon manage to build itself up to the pre-virus level. China is reporting fewer and fewer new cases and more and more operations are returning back to normal.
Airlines, hotels and travel firms remain at the bottom of the FTSE, as does Ashtead following a decline in pretax profits in the third quarter which the company reported yesterday.
Euro dips as virus spreads in Europe
The euro is struggling against the dollar as the spread of the virus in Europe is beginning to intensify. Germany has recorded 37 new cases in the last day and France reacted with 120 school closures.
The spread comes at a time when the German economy is already struggling with the effects of trade tariffs and the pre-virus slowdown in orders from China. The markets are beginning to price in the likelihood of an ECB rate cut next week which will further dampen the euro’s chances of a rally against the dollar.