Stocks climb on recession watch; pound gains on Johnson exit / Photo: © AFP
Stocks climb on recession watch; pound gains on Johnson exit
Stock markets recovered further Thursday as investors weighed recession risks, while the pound rallied on the resignation of Britain's scandal-hit Prime Minister Boris Johnson as leader of the Conservative party.
Elsewhere, oil prices climbed with both main contracts back over $100 per barrel, and the euro remained around 20-year lows versus the dollar.
"Stocks bounce as pressure points ease," said independent markets analyst Stephen Innes.
The Federal Reserve on Wednesday stressed its readiness to continue hiking US interest rates to tackle soaring inflation.
Minutes of their last meeting made clear that officials did not plan to let up in efforts this year to try to cool prices.
Inflation stands at the highest levels since the early 1980s both in the United States and Britain, where attention Thursday was firmly on political upheaval gripping the nation.
The pound rallied against the dollar and euro on Johnson's resignation as Conservative party leader -- paving the way for a successor to replace him as prime minister.
Gains by London's blue-chip FTSE 100 stock index accelerated following Johnson's announcement, standing up 1.3 percent in afternoon trading.
Dozens of ministers have quit his scandal-hit government since Tuesday, including former finance chief Rishi Sunak.
"The pound is pushing higher, hitting session highs inching closer back up to... $1.20, a critical support level it broke below this week amid the political and economic uncertainty," said Victoria Scholar, head of investment at Interactive Investor.
"The currency market is relieved that Johnson is finally resigning, removing some of the political uncertainty that was priced into the pound and paving the way for a new prime minister," she added.
Berenberg Bank Senior Economist Kallum Pickering said that "the UK economy and its financial markets look set to benefit from more stable leadership."
The euro meanwhile remained under $1.02 -- a level it slumped under this week on its way to hitting a 20-year low.
The European single currency is being hammered by growing fears of a recession for the eurozone and the likelihood of more aggressive US interest-rate hikes.
In afternoon trading, Paris stocks were up 1.5 percent and Frankfurt rose 1.7 percent.
Wall Street stocks rose at the opening bell, with the Dow adding 0.7 percent.
- Key figures at around 1330 GMT -
London - FTSE 100: UP 1.3 percent at 7,199.16 points
Frankfurt - DAX: UP 1.7 percent at 12,808.56
Paris - CAC 40: UP 1.5 percent at 6,001.94
EURO STOXX 50: UP 1.7 percent at 3,479.42
New York - Dow: UP 0.7 percent at 31,254.17
Tokyo - Nikkei 225: UP 1.5 percent at 26,490.53 (close)
Hong Kong - Hang Seng Index: DOWN UP 0.3 percent at 21,643.58 (close)
Shanghai - Composite: UP 0.3 percent at 3,364.40 (close)
Pound/dollar: UP at $1.1967 from $1.1921 Wednesday
Euro/pound: DOWN at 85.02 pence from 85.43 pence
Euro/dollar: DOWN at $1.0175 from $1.0186
Dollar/yen: DOWN at 135.79 yen from 135.93 yen
Brent North Sea crude: UP 2.4 percent at $103.06 per barrel
West Texas Intermediate: UP 2.8 percent at $101.32 per barrel
D.Serrano--ESF
