Governments and central banks continue to shield equities from the bad news on fresh spikes in coronavirus and evidence of the economic damage wrought by the pandemic,” says AJ Bell investment director Russ Mould.
“That explains a strong end to the week for the FTSE 100 which is up more than 1%. The question is how long fiscal and monetary largesse can keep the rally going.
“The upcoming second quarter results season could result in a collision with reality as the impact of Covid-19 really hits corporate profits.
“Earlier in the year the commodities markets offered early warning on the impact of the virus and it is notable that safe haven gold continues to shine above $1,760 per ounce while fuel of the global economy, oil, is starting to hand back some of the gains seen in recent weeks.”