Stock prices in the UK took another tumble today (Wednesday) despite the Chancellor’s £330 billion plus support package for businesses.
The FTSE 100 slumped more than 5% in morning trading before recovering slightly by mid-afternoon. Travel, housing and aerospace firms saw the biggest falls.
Meanwhile, the value of the pound dropped to $1.1966 against the US dollar – its lowest level for six months.
The UK’s announcement of a massive stimulus package was soon followed by a similar $1 trillion injection by the US Treasury. US indexes rose 5% on Tuesday after the measures were announced, helping to regain some of the ground lost in Monday’s large falls.
In addition to plans announced by the Federal Reserve last week, the US Treasury yesterday outlined how a $1 trillion package would be spent, with $250 billion set aside for cheques sent directly to residents.
Asian markets were less enthusiastic about the global economic response, with Japan’s Nikkei 225 falling 1.7%, the Hang Seng in Hong Kong down 1.9% and China’s Shanghai Composite index down 0.5%.