FTSE 100 recovers after worst day in two months
European stock markets made modest gains on Wednesday, recovering from a big sell-off in the prior session.
The FTSE 100 (^FTSE) closed up 0.5% in London, following a sharp sell-off late on Tuesday that saw the FTSE 100 and other major markets close down as much as 2%. £37bn was wiped off the FTSE 100 in what was the worst one-day performance in two months.
Medical stocks rallied after positive results from US medical devices company Intuitive Surgical. London-listed fake hip manufacturer Smith & Nephew (SN.L) topped the FTSE 100 with a gain of 3.6% as traders bet that it too might be doing good business.
Data published first thing on Wednesday showed UK inflation was running at 0.7%, which was broadly in-line with forecasts.
"For now the threat of rate rises to combat inflation looks very remote," said Russ Mould, investment director at AJ Bell.
The DAX (^GDAXI) closed up 0.4% in Frankfurt and the CAC 40 (^FCHI) ended 0.7% higher in Paris.
"European markets are in recovery mode today, with stocks turning upward to regain lost ground after sharp declines yesterday," said Joshua Mahoney, a senior analyst at IG.
"Markets are caught between optimism over vaccination progress at home, and the fact that global efforts to combat the pandemic remain reliant upon economic restrictions until vaccines are widespread."
Sentiment in Europe was helped by trading on Wall Street. The S&P 500 (^GSPC) was up 0.5% shortly by the time market shut in Europe, while the Dow Jones (^DJI) was up 0.5% and the Nasdaq (^IXIC) was up 0.6%.
The Nasdaq had initially been dragged down by Netflix (NFLX), which saw its shares crash over 10% on Tuesday night after posting a big slowdown in subscriber growth. Shares tanked another 7% at the open in New York.
Asia markets closed lower overnight into Wednesday amid rising COVID fears.
"Rising infection rates in Asia, and India and Japan specifically, are raising concerns that any global economic recovery will face significant delays in a region where vaccination rates are well behind those of Europe and the US," said Micheal Hewson, chief market analyst at CMC Markets.
Japan's Nikkei (^N225) dropped 2%, the Hong Kong Hang Seng (^HSI) fell 1.6%, and South Korea's KOSPI was down 1.5%. Markets on China's mainland avoided the wave of selling, with the Shanghai Composite (000001.SS) flat and the Shenzen Component (399001.SZ) rising 0.4%.
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