British stocks continued to rally on Thursday as investors digested more signs of a looming economic boom in the UK.
The FTSE 100 (^FTSE) closed up 0.8% in London to reach its highest level since January 2020. The FTSE 250 (^FTMC) hit a record high on Wednesday and continued to push higher on Thursday. The index closed up 0.3%.
UK stocks have been powered higher in recent sessions by optimism about the next stage of economic reopening in Britain on Monday. Economists believe pent up demand could lead to a mini-economic boom as restrictions lift. Private sector data published on Thursday showed UK construction activity was already at a six-and-a-half-year high in March.
"Since returning from Easter the German index has started to retreat from its April-opening all-time highs," said Connor Campbell, a financial analyst at SpreadEx. "By contrast the FTSE was having a fine old time of it – though, that is in part because it is nowhere near its best-ever levels."
ECB minutes published around lunchtime showed the central bank "accepts higher longer-term nominal rates as a result of higher inflation expectations," said Carsten Brzeski, global head of macro at ING.
"So, as long as real rates remain stable, everything is fine. Any increase in real rates will only be tolerated by the ECB if it reflects improved growth prospects."
Oil came under early pressure after US data showed a sharp increase in gasoline stockpiling. However, Brent futures caught a bid as US investors woke up. Brent futures (BZ=F) were up 0.2% to $63.28 per barrel by the end of the trading day in Europe. Crude (CL=F) was still off 0.2% to $59.76.
"Concerns continue to grow that we could see more oil supply in the coming weeks, and demand may not be able to keep up with supply," said Naeem Aslam, chief market analyst at Avatrade.
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US markets opened mostly higher despite worse-than-expected jobs numbers. Initial jobless claims rose to 744,000 last week, up from 719,000 during the prior week. The market had expected 680,000 claims.
"Today’s US weekly jobless claims threw something of a curve ball into the rosy outlook we have seen recently," said Charles Hepworth, investment director at GAM Investments.
But he added: "This is likely to be a number that the markets become less and less focused on as the vaccine roll-out continues at pace and the expectation is that companies will re-hire lost labour as the economy becomes less constricted by virus restrictions."
Fed minutes, published Wednesday evening European time, showed the central bank policy makers "remain cautious with regards to the economic recovery and do not feel any urgency to remove accommodation," according to Deutsche Bank.
Asian markets were broadly unchanged overnight. China's Shanghai Composite (000001.SS) and Japan's Nikkei (^225) both closed flat, while South Korea's KOSPI (^KS11) gained just 0.2%. The exception was the Hong Kong Hang Seng (^HSI), which rallied 1.2%.
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