(Alliance News) - Last week's vaccine optimism spilled into Monday, with some encouraging economic data from China and Japan also helping to push London stocks higher at midday.
The best performers in the FTSE 100 were travel and leisure stocks, bolstered by vaccine hopes, while shares in Vodafone and Smiths Group also advanced following company updates.
The FTSE 100 index was up 43.24 points, or 0.7%, at 6,359.63 midday Monday. The mid-cap FTSE 250 index was up 157.64 points, or 0.8%, at 19,427.64. The AIM All-Share index was up 0.6% at 1,005.81.
The Cboe UK 100 index was up 0.5% at 632.90. The Cboe 250 was up 0.9% at 16,720.08, and the Cboe Small Companies up 1.2% at 10,794.12.
In mainland Europe, the CAC 40 in Paris was up 1.2% - with shares in Unibail-Rodamco-Westfield gaining 12% after the resignation of Colin Dyer as chair late Friday - while the DAX 30 in Frankfurt was up 0.6% on Monday.
"European markets have resumed the risk-on theme that dominated much of last week, with overnight gains in Asia setting the tone for a positive start today," said Joshua Mahony, senior market analyst at IG.
"The latest economic data from Japan and China helped bolster the recovery theme," he noted.
China's retail sales continued a general recovery in October, official data showed Monday, on the back of a national holiday and policies aimed at boosting spending. Although China has largely brought the coronavirus under control, spending has been slower to recover as the world still grapples with the impact of the pandemic.
Beijing's National Bureau of Statistics said Monday that retail sales in the world's second-largest economy had risen 4.3% on-year last month.
Industrial production growth in October remained the same as the month before, but continued to rise more than expected at 6.9%, according to the NBS.
In further encouraging data from Asia, Japan's economy exited recession in the third quarter, growing a better-than-expected 5.0%.
The positive figures come after three quarters of contraction in the world's third-largest economy, with revised data showing the economy shrank 8.2% in the second quarter, more than the previously estimated 7.9%.
The yen was stronger on Monday. Against the yen, the dollar softened to JPY104.60 versus JPY104.65.
The data from Japan and China helped to bolster last week's optimism, which had been driven by vaccine hopes.
Last Monday, US pharma giant Pfizer and German firm BioNTech announced that an experimental vaccine developed by the companies is 90% effective in preventing Covid-19, marking a major milestone in the search for a defence against the pandemic.
The best risers in London's FTSE 100 at midday were firms worst hit by the Covid-19 crisis. British Airways-parent International Consolidated Airlines was up 7.0%. IAG now is up more than 60% since the start of November, though still down almost 40% since the start of the year. Jet engine maker Rolls-Royce was up 6.7% and Premier Inn chain owner Whitbread up 5.0%.
Dealers are "clearly optimistic" about the possibility of a Covid-19 drug, said CMC Markets's David Madden.
"Adding to that view, Ocado, the online supermarket, and Reckitt Benckiser, a producer of cleaning products amongst other items, are in the red. Both stocks benefited from the pandemic and now it seems that dealers are unwinding their positions," said Madden.
Ocado was down 1.8% at midday and Reckitt down 1.5%.
Turning back to the blue-chip risers, Smiths Group advanced 2.6%. The engineering business said it is confident of meeting market expectations for financial 2021 due to a "resilient" performance in the first quarter despite disruption caused by the pandemic.
Revenue for the three months ended October 31 was down 2% on an underlying basis, the firm said, noting John Crane performed as expected, with challenging market conditions in Energy partially offset by "modest" growth in its Industrials unit.
Elsewhere, Smiths reported "strong performance" in its Detection division driven by the delivery of original equipment orders. It added that the Flex-Tek division also saw good Industrial sales that more than offset weakness in the Aerospace unit.
Vodafone rose 2.6% as it reported a "resilient" first half performance, swinging to an interim profit.
Group revenue in the six months to September 30 fell 2.3% annually to EUR21.43 billion from EUR21.94 billion.
Vodafone swung to a pretax profit of EUR2.05 billion from a EUR511 million loss a year earlier. The first half of the last financial year was hit by a EUR2.60 billion loss from its share of results from joint ventures. This year, Vodafone booked a EUR260 million such gain.
Vodafone generates the bulk of its cash from service revenue, which includes monthly access charges, airtime usage and roaming. For the whole of the first half, service revenue was 0.8% lower year-on-year at EUR18.42 billion from EUR18.54 billion.
Promisingly, its service revenue performance improved quarter-on-quarter on an organic basis. The organic service revenue decline in the second quarter was 0.4%, tempered from the 1.3% annual fall in the first quarter.
"Today's results underline increased confidence in our full-year outlook. We are reporting a resilient first half performance, and we continue to see good commercial momentum across the group," Chief Executive Officer Nick Read said.
FTSE 250-listed IT infrastructure firm Softcat rallied 8.1% on an upbeat update, reporting "positive momentum" heading into its second quarter.
For the three months ended October 31, its first quarter, Softcat said it achieved year-on-year growth revenue, gross profit, and operating profit, without providing figures. It also met its recruitment targets.
Additionally, Softcat said its cash generation in the quarter stayed "in line with normal trends". Softcat commented that it is pleased with its results to date and noted additional "positive momentum" as it moves into its second quarter.
Chief Executive Graeme Watt said: "We've performed well during the first quarter and saw good results from both corporate and public sector segments but are mindful that there is still a long way to go. We remain focussed on the well-being of our people and supporting our customers."
In New York, stocks are called for a strong start to the week. The Dow Jones is pointed up 0.9%, the S&P 500 up 0.8% and the Nasdaq Composite up 0.5%.
The dollar was soft at the start of the week, dented by Monday's risk-on moves.
The euro traded at USD1.1843 on Monday, rising from USD1.1824 late Friday. Sterling was quoted at USD1.3195, higher than USD1.3172 at the London equities close on Friday.
Safe haven gold struggled. The metal was quoted at USD1,891.47 an ounce on Monday, flat on USD1,891.34 on Friday. Brent oil, however, got a boost. It was trading at USD43.62 a barrel by midday, higher than USD42.88 late Friday.
By Lucy Heming; lucyheming@alliancenews.com
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