(Alliance News) - Stocks in London ended mostly higher on Tuesday as investors reacted positively to the UK government's plans to gradually reopen the economy.
The FTSE 100 index closed up 13.70 points, or 0.2%, at 6,625.94. The FTSE 250 ended up 76.63 points, or 0.4%, at 21,057.72, but the AIM All-Share closed down 18.08 points, or 1.5%, at 1,182.55.
The Cboe UK 100 ended flat at 658.96, the Cboe UK 250 closed up 0.5% at 18,722.58, and the Cboe Small Companies ended up 0.2% at 12,933.96.
In Paris the CAC 40 ended up 0.1%, while the DAX 30 in Frankfurt ended 0.1% lower.
CMC Markets analyst Michael Hewson said: "After a promising start European markets have struggled to maintain their early market optimism though it has been notable, we've seen decent gains continue in the likes of travel and leisure stocks, with multi month highs in a lot of cases.
"Over the last three days this renewed buoyancy has been evident in anticipation of a possible reopening, and with a set of deadlines to focus on, there is a renewed sense of optimism that we could well see an end point for restrictions which would mark a slow return to some sort of normal."
In the FTSE 100, commercial property companies British Land and Land Securities ended the best performers, up 5.4% and 4.5% respectively, on hopes shopping centres and offices will reopen.
Conversely, stay-at-home beneficiaries Ocado, Just Eat Takeaway and Avast ended down 2.8%, 1.9% and 2.6% respectively.
At the other end of the large-cap index, Scottish Mortgage Trust ended the worst performer, down 5.1%, tracking a sell-off in US tech stocks. The trust, run by the Edinburgh-based fund manager Baillie Gifford, counts Amazon and Tesla among its high-profile holdings. Jeff Bezos's Amazon and Elon Musk's Tesla were down 1.1% and 4.5% respectively in New York.
"The Nasdaq fell nearly 2.5% [on Monday] as investors dumped names like Apple and Amazon amid growing concerns about rising inflation expectations, the direction of interest rates and how that would put tech stock valuations into question. Tech-heavy investment trust Scottish Mortgage has fallen by more than 12% in just over a week," explained AJ Bell's Russ Mould.
InterContinental Hotels Group closed 1.6% lower after the hotel operator posted a swing to loss for 2020, a year in which the hospitality industry was hammered by coronavirus restrictions across the globe.
Total revenue for 2020 slumped 48% to USD2.39 billion from USD4.63 billion, with the Denham, England-based company swinging to a pretax loss of USD280 million from a USD542 million profit in 2019.
Revenue per available room - a key metric in the hotels industry - fell 53%, though IHG noted the variation by region reflected local market Covid-19 restrictions and recovery pace.
HSBC closed 0.9% lower after the Asia-focused bank reported a sharp drop in profit in 2020, as it saw its global operations struggle to keep up with its Asian business but offered some "cautious optimism" going forward.
For 2020, HSBC saw its pretax profit drop to USD8.78 billion from USD13.35 billion in 2019. The 34% fall was blamed on higher expected credit losses and other credit impairment charges and lower revenue.
The pound was quoted at USD1.4103 at the London equities close, up sharply from USD1.4060 at the London equities close Monday, trading at its highest levels since April 2018 after UK Prime Minister Boris Johnson set out his timetable to begin easing England's coronavirus lockdown from March 8.
The Prime Minister on Monday outlined a "cautious but irreversible" roadmap to ease lockdown restrictions by the summer as he acknowledged that there is "no credible route to a zero-Covid Britain".
On Tuesday, Johnson reiterated that he was "very optimistic" that he will be able to fully remove all of England's coronavirus restrictions on June 21 but warned "nothing can be guaranteed".
Facing criticism from some Tory backbenchers over the pace of change, Johnson said he was "hopeful" that all legal controls can be removed on the final date earmarked in his four-step plan.
The pound shrugged off disappointing UK jobless data earlier in the day. The UK unemployment rate rose to a near five-year high at 5.1%, official data showed Tuesday, and is set to rise further once the government removes its furlough support scheme currently keeping millions of workers employed.
"Sterling seems to reflect optimism about the reopening of the UK economy after Boris Johnson's roadmap out of restrictions. It may be slow and abundantly cautious, but words like 'irreversible' raise hopes that by June we really will be beyond Covid," said Markets.com analyst Neil Wilson.
The euro stood at USD1.2160 at the European equities close, up from USD1.2145 late Monday, after data showed eurozone annual inflation rate bounced into positive territory at the start of 2021.
The bloc's annual inflation rate was confirmed at 0.9% for January, figures released by Eurostat showed, versus a 0.3% fall in consumer prices in December. The figures mark an end to a streak of deflation that started in August - something not seen in the eurozone since 2016 - driven by tumbling energy prices as the pandemic slammed demand for fuel.
Against the yen, the dollar was trading at JPY105.11, up slightly from JPY105.07 late Monday.
Stocks in New York were lower at the London equities close for a second-straight session as investors worry higher bond yields will quell the rally in shares of fast-growing companies.
The DJIA was down 0.2%, the S&P 500 index down 0.5% and the Nasdaq Composite down 1.3%.
In his closely-watched Congressional testimony, US Federal Reserve Chair Jerome Powell said rising Treasury yields are one of many financial conditions the central bank watches, and yields are rising on expectations of an improving economy.
Brent oil was quoted at USD65.07 a barrel at the equities close, up from USD64.45 at the London equities close on Monday, on higher demand prospects as the world emerges from lockdowns.
Gold was quoted at USD1,803.05 an ounce at the London equities close, lower against USD1,810.01 late Monday.
The economic events calendar on Wednesday has Germany GDP figures at 0700 GMT. Fed Chair Powell's Congressional testimony continues.
The UK corporate on Wednesday has annual results from household goods firm Reckitt Benckiser and from high street lender Lloyds Banking Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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