LONDON MARKET CLOSE: Stocks Rise As Covid-19 Vaccine Rally Continues

(Alliance News) - Stocks in London ended higher on Thursday as investors continued to take heart ...

Alliance News 3 December, 2020 | 5:07PM
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(Alliance News) - Stocks in London ended higher on Thursday as investors continued to take heart from positive coronavirus vaccine developments alongside a fall in US jobless claims.

On Wednesday, the UK became the first country in the world to approve the Pfizer and BioNTech vaccine, putting pressure on the US to follow suit.

US Food & Drug Administration Commissioner Stephen Hahn met with White House chief of staff Mark Meadows for second day in a row on Wednesday as President Donald Trump remains frustrated no Covid-19 vaccine has been granted US emergency approval yet.

The FDA had previously said it scheduled a meeting of its outside advisory panel to discuss Pfizer and BioNTech's application for emergency use authorisation for a coronavirus vaccine for December 10.

The FTSE 100 index closed up 26.88 points, or 0.4%, at 6,490.27. The mid-cap FTSE 250 index closed up 254.67 points, or 1.3%, at 20,132.44. The AIM All-Share index closed down 0.1% at 1,066.21.

The Cboe UK 100 index closed up 0.5% at 646.42. The Cboe 250 ended up 1.6% at 17,441.17, and the Cboe Small Companies finished up 1.3% at 11,661.99.

In Paris the CAC 40 ended down 0.2%, while the DAX 30 in Frankfurt ended 0.5% lower.

In the FTSE 100, Rolls-Royce ended the best performer, up 16%. The jet engine maker's stock, which had been battered as a result of the coronavirus pandemic, has been recovering as positive vaccine developments boost the prospects for global travel.

The travel sector was also given a boost after Ryanair Holdings said it has ordered 75 extra Boeing Co MAX-8200 aircraft, in the wake of the planes being approved by US regulators to take to the skies once again.

The agreement takes the number of MAX-8200 aircraft in the Irish carrier's fleet to 210, with a total value of over USD22 billion.

Ryanair ended up 3.3%, while Boeing was up 7.4% in New York.

Flutter Entertainments closed up 5.6% after the gaming company said it has struck a USD4.18 billion deal to own nearly all of the FanDuel business, boosting the Paddy Power owner's US exposure.

Flutter also outlined plans for an equity raise, with Fox Corp investing further in the bookmaker, to help fund the deal.

The deal - which will see the FTSE 100 company top up its stake in FanDuel by just over of 37% - needs the support of Flutter's shareholders at an extraordinary meeting planned before the end of the year.

Should the deal with sellers Fastball Holdings go ahead, Flutter will have a 95% stake in the fantasy sports, casino and horse racing business, up from just under 59% now.

The USD4.18 billion deal will be part-funded by USD2.09 billion in cash and the issue of 11.7 million Flutter shares to Fastball.

The buy "materially increases exposure to US market", Flutter said, "the most attractive sector opportunity today".

At the other end of the large caps, online takeaway platform Just Eat Takeaway ended the worst performer, down 3.0%, as lockdown restrictions in England were eased, moving back into a tiered system.

"Rolls-Royce is leading the push higher for value stocks today, with market optimism sparking a push towards some of the more unloved names. As the UK restrictions loosen in the wake of the nationwide lockdown, we have seen weakness for coronavirus benefactors Just Eat and AstraZeneca," said IG Group's Josh Mahony.

The pound was quoted at USD1.3485 at the London equities close, up sharply from USD1.3343 at the close Wednesday, as Brexit talks remain on a knife-edge.

UK Prime Minister Boris Johnson will press ahead with plans allowing ministers to tear up the Brexit divorce deal despite the current round of UK-EU talks being at a critical stage.

The UK government confirmed it will ask MPs to reinstate controversial legislation giving ministers the power to break international law by ignoring provisions in the Withdrawal Agreement relating to Northern Ireland.

MPs will vote on the UK Internal Market Bill on Monday, potentially throwing talks on a UK-EU trade deal into crisis unless an agreement can be reached by then. The EU has already taken the first steps in a legal action over the legislation.

The developments came as talks on a post-Brexit deal were continuing, led by David Frost and the EU's Michel Barnier.

Speculation in Westminster suggests that the UK government could draw back from the controversial measures if a trade deal can be agreed with the EU. Ireland's foreign minister Simon Coveney suggested a deal could be reached within days as he urged EU members to "hold our nerve".

Meanwhile, the UK service sector contracted in November, though at a more moderate pace than initially expected, figures showed.

The IHS Markit/Chartered Institute of Procurement & Supply UK services purchasing managers' index dropped to 47.6 in November from 51.4 in October. This marked the first time in five months the index has registered below the no-change mark of 50, indicating the services sector shrank in November.

However, the reading was higher than the flash estimate of 45.8 and signalled a much slower downturn in activity than the April's record low of 13.4.

The euro stood at USD1.2153 at the European equities close, up sharply from USD1.2086 late Wednesday.

"The dollar started December with a sharp weakening. EURUSD crossed 1.2000 on Tuesday, after which the dollar's melting gained momentum. The Euro broke out of its trading range at 1.16-1.20, where it had spent the last four months. Potentially, it may now experience weak resistance in this non-trading area. This means that EURUSD may move relatively quickly to the upper limit of the 1.20-1.25 range. Given the accumulated rate of the weakening of the dollar and the lack of substantial resistance in this area, EURUSD could test 1.25 in the coming weeks," said analysts at FXPro.

Against the yen, the dollar was trading at JPY103.73, down from JPY104.57 late Wednesday.

Stocks in New York were higher at the London equities close as US jobless claims fell less than expected against a backdrop of rising coronavirus cases.

The DJIA was up 0.5%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.5%.

The US recorded over 3,100 Covid-19 deaths in a single day, obliterating the record set last spring, while the number of Americans in hospital with the virus has eclipsed 100,000 for the first time and new cases are topping 200,000 a day, according to figures released on Thursday.

The three benchmarks altogether showed a country slipping deeper into crisis, with perhaps the worst yet to come, in part because of the delayed effects from Thanksgiving, when millions of Americans disregarded warnings to stay home and celebrate only with members of their household.

Health authorities had warned that the numbers could fluctuate strongly before and after Thanksgiving, as they often do around holidays and weekends, when because of reporting delays, figures often drop, then rise sharply a few days later as state and local agencies catch up with the backlog.

US initial jobless claims showed signs of improvement last week, according to figures on Thursday. For the week ended November 28, seasonally-adjusted initial claims came in at 712,000, down from 778,000 the week before. This beat expectations, according to FXStreet, of a slower fall to 775,000.

The decrease for the November 28 period came after two successive weeks of increase.

Continuing claims, meanwhile, fell to 5.5 million for the week ended November 21 from 6.1 million the week prior. This also beat expectations of a fall to 5.9 million.

Brent oil was quoted at USD48.50 a barrel at the equities close, higher from USD47.90 at the close Wednesday, as the virtual Organization of the Petroleum Exporting Countries meeting got underway.

The members of the OPEC group of oil producers were meeting with their allies on Thursday to see if they can reach an accord on extending production cuts over the coming months.

The video-conference meeting of the OPEC+ grouping was pushed back from Tuesday and comes after three days of inconclusive discussions among the 13 members of OPEC proper.

Observers say the postponement points to an agreement being harder to reach than initially thought. The meeting was originally scheduled for 1300 GMT but eventually started almost two hours later.

Most producers, including OPEC kingpin Saudi Arabia, favour an extension of the current agreement, which entails a cut of 7.7 million barrels per day and was scheduled to be eased to 5.8 million bpd on January 1.

Gold was quoted at USD1,826.52 an ounce at the London equities close, slightly lower against USD1,827.01 late Wednesday.

The economic events calendar on Friday has Germany factory orders at 0700 GMT and the US jobs report for November at 1330 GMT.

The UK corporate calendar on Friday has interim results from housebuilder Berkeley Group.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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