Global stocks rise on BoE rate cut, pound feels the pain

Thu Aug 4, 2016 9:04pm EDT
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - Global stock markets rose and sterling slid on Thursday after the Bank of England cut interest rates and revived a bond-buying program to cushion the economic blow from Britain's June 23 vote to leave the European Union.

U.S. stocks and the dollar traded in a tight range as investors exercised caution ahead of Friday's jobs report that could offer clues to the timing of the next U.S. rate hike.

The Bank of England cut its main rate by a quarter percentage point to a record low 0.25 percent and said it would take "whatever action is necessary" to achieve stability in the wake of Britain's vote to leave the EU.

The rate cut was widely expected but not the other measures.

"The Bank of England has hit a perfect 'High Five' at today's meeting, over-delivering against market expectations and bucking the recent trend of central banks disappointing," said Nick Gartside, a JP Morgan Asset Management portfolio manager.

MSCI's world stocks index .MIWD00000PUS, which tracks shares in 45 nations, snapped a three-day losing streak and was up 0.33 percent.

Wall Street, meanwhile, was subdued as investors kept to the sidelines ahead of Friday's U.S. payrolls report.

"Folks would probably prefer to wait on those numbers before they make a commitment in front of them," said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas.   Continued...

People walk through the lobby of the London Stock Exchange in London, Britain November 30, 2015. REUTERS/Suzanne Plunkett