London shares extended gains for a second session on Wednesday as an imminent U.S. stimulus package and moves by companies to deal with the financial effects of the coronavirus crisis offset the impact on markets of a surge in cases domestically. The FTSE 100 closed up 4.5% following its biggest percentage gain on Tuesday since the wild swings of the 2008 financial crisis.
That aided a 16% recovery from the lows hit last week as investors pinned hopes on massive steps by central banks and governments to cushion the economic impact of the pandemic. U.S. senators are set to vote on a $2 trillion package of legislation, expected to include a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of U.S. families.
“What the European, British or the U.S. governments have done in terms of stimulating the economy has helped, but I don’t think we’re out of rough times” said Simon Calton, chief executive officer at Carlton James in London. Volatility was still in play, driving the blue-chip FTSE index down 0.8% in late morning trading. It recovered as oil companies and other recently battered stocks surged.