Global stocks steamed ahead on Thursday as US unemployment claims reached new pandemic lows.
The number of Americans applying for unemployment support fell last week by more than projected, with initial claims in regular state programmes decreasing by 51,000 to 364,000 in the week ending 26 June.
The median estimate by economists expected 388,000 initial applications.
However, US Labour Department data showed, continuing claims for ongoing state benefits increased to 3.47 million the week ending 19 June.
"This shows that whilst economic activity continues to improve, the recovery has a long way to go as the economy heals," said Neil Birrell, Premier Miton's chief investment officer.
In London, the FTSE 100 (^FTSE) closed almost 1.3% higher, recovering ground it lost on Wednesday, as investors piled into airlines and retail stocks, suggesting that the Delta variant, which was first detected in India, is no longer considered to be a major concern.
Russ Mould, investment director at AJ Bell, said: “These strong market gains could serve to fire up investors and help them to regain confidence in equities. The key challenge is to sustain the positive performance as it could only take a few down days on the market for investors to turn gloomy again.”
It came as chancellor Rishi Sunak’s furlough programme started to wind down from Thursday. Employers must now pay 10% of their furloughed workers' usual wage, while the government will continue to pay the other 70%.
From 1 August, the employers' contribution rises to 20%, with the government's contribution reducing further, until the scheme eventually ends on 30 September, alongside the launch of the kickstart scheme.
Business leaders have continuously sounded the alarm over a renewed threat to jobs, particularly as the UK government delayed its roadmap out of lockdown by four weeks until 19 July.
Frances O’Grady, general secretary of the Trades Union Congress (TUC), said: “Ministers must not pull the plug on our recovery by cutting off support too soon.
“We need a cast-iron commitment from the chancellor that he will extend furlough for as long as is needed, rather than ending it abruptly in three months’ time. Working families need this certainty now – not a rollercoaster approach to protecting livelihoods.”
Watch: How the UK government furlough scheme is changing
The UK reported a further 26,068 cases on Wednesday as the Delta variant, which was first detected in India, continues to spread. This was the highest number of daily cases since late January.
Additionally, Scotland, which now has the highest rate of cases in the UK, reported its highest number of cases – 3,887 – since the entire pandemic started.
On Wednesday the S&P just about eked out another gain to close at a fresh all-time high.
Asian shares were mostly lower on Thursday as concerns around the spread of the Delta variant have continued to dampen sentiment.
Japan's benchmark Nikkei 225 (^N225) slipped 0.3% despite the Bank of Japan's quarterly "tankan" survey showing continuous recovery, with large manufacturers' sentiment remaining largely positive despite the pandemic. Elsewhere, the Shanghai Composite (000001.SS) edged nearly 0.1% lower on the day.
Trading was closed in Hong Kong for the anniversary of the handover of the former British colony to Beijing.
On Thursday the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, are holding their monthly meeting, where they will decide whether to keep relaxing their production curbs by raising oil output in August.
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