Coronavirus: FTSE posts biggest gain since 2008 on $2trn stimulus hopes

The FTSE 100 has recorded its biggest one-day rise since 2008 as global stock markets were buoyed by hopes of a $2trn (£1.7trn) US economic rescue package.

Britain’s leading share index surged just over 9%, or 452 points, higher while in New York, the Dow Jones was up by 8% just after the close in London.

It came after House of Representatives speaker Nancy Pelosi told CNBC there was “real optimism” of Congress cutting a deal with the White House in coming hours.

Germany’s Dax soared by 11% while France’s Cac 40 added 8%, building on a positive performance from Asian markets overnight.

For the FTSE, it was the biggest one-day rise in percentage terms since November 2008 when markets were gripped by volatility at the height of the financial crisis.

The rally helped ravaged global share indices claw back some ground – having lost almost a third of their values in the past month in reaction to the spread of COVID-19 and the speed by which it has forced everyday life to be closed down.

On Monday, unprecedented moves by the US central bank to bolster asset purchases – bond-buying – by an unlimited amount had only a temporary effect before markets succumbed to more selling.

Now all eyes are on the US government turning on the spending taps to support the real economy – and the businesses and households threatened with ruin by the pandemic.

Hopes of a breakthrough in Washington that will deliver the package meant stocks were buoyant despite early signs of the devastating impact that the pandemic is having on the economy.

The flash estimate Purchasing Managers’ Index (PMI) figures for March scored UK output levels at 37.1 – with a figure below 50 indicating contraction. It had stood at 53 in February.

A separate report covering the eurozone charted an “unprecedented” collapse – the output figure coming in at 31.4 – while it was a similar story in the US where evidence also pointed to a sharp reversal in growth.

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