London close: Stocks finish firmer on vaccine hopes, Biden transition
London equity markets finished firmer on Tuesday, with sentiment boosted after Donald Trump authorised President-elect Joe Biden's official transition process to begin, and following reports that former Federal Reserve chair Janet Yellen is in line to be the next US Treasury Secretary.
The FTSE 100 ended the session up 1.55% at 6,432.17, and the FTSE 250 added 1.06% to 19,789.56.
Sterling was in a mixed state, last strengthening 0.23% on the dollar to $1.3351, but weakening 0.09% to €1.1242.
“Energy stocks are helping to lead the FTSE 100 higher today, as a widespread market exuberance takes hold in anticipation of a global economic recovery,” said IG senior market analyst Joshua Mahony.
“Donald Trump’s decision to finally allow the initial presidential transition process to take place highlights a fading risk for markets.
“Given the sharp gains seen in global equities in the wake of the US election, the threat of a legal battle did provide one dark cloud looming overhead threatening to spoil the party for stocks.”
Mahony said that, while some were left unimpressed by the efficacy of the AstraZeneca vaccine, the low price point and easy storage requirements meant that the product could do more to help the global “push back to normality” than either of the Moderna and Pfizer vaccines.
“There have been questions over whether the vaccine will be approved in the US given questionable efficacy levels and a lack of safety disclosures, yet the fact is that this vaccine will be more useful to the rest of the world as the US already has access to a wealth of inoculations via the likes of Pfizer and Moderna.”
On the corporate front, British Airways and Iberia parent IAG and engine maker Rolls-Royce were on the front foot again, rising 2.4% and 7.81%, respectively.
The stocks were underpinned by recent vaccine updates and news that from next month, travellers who arrive in England would be able to cut their quarantine to five days from 14 if they tested negative for coronavirus on the fifth day.
Passengers would have to pay for the tests privately.
Other travel and leisure stocks also gained, with InterContinental Hotels rising 2.82%, Premier Inn owner Whitbread advancing 6.69%, TUI surging 14.54%, Carnival steaming ahead 10.54%, Cineworld leaping 6.69%, easyJet ascending 7.78% and Upper Crust owner SSP 13.55% higher.
BP and Shell were both up as oil prices advanced, by 8.42% and 5.66%, respectively, while miners Antofagasta and Glencore were on the rise after rating upgrades at Jefferies, adding 7.4% and 5.97%.
Pets at Home - classed as an essential retailer during lockdown - reversed earlier losses to close up 0.53% after it reported higher interim profits and maintained its dividend, after a strong second quarter as it forecast full-year results to be in line with expectations.
On the downside, precious metals miners Fresnillo, Centamin and Hochschild all lost their shine as gold prices hit a four-month low, sliding 3.41%, 3.3% and 2.95%.
Inspection, product testing and certification company Intertek fell 6.42% after a disappointing trading statement, while JD Sports Fashion fell 6.5% following reports it is in exclusive talks to take over Debenhams.
Online electricals retailer AO World slumped 9.89% despite saying it swung to a profit in the first half as strong demand amid the pandemic boosted revenues.
In the six months to 30 September, the company swung to a pre-tax profit of £18.3m from a loss of £5.9m in the same period a year ago, with revenue up 53.2% to £717m.
“It remains to be seen whether the meteoric rise can be continued, but for the moment an increase in the share price of 382% over the last year, as compared to a dip of 4.4% for the wider FTSE 250, has rewarded shareholders handsomely,” said Richard Hunter, head of markets at Interactive Investor.
“Even though this can partially explain an inevitable bout of strong profit-taking on these numbers, the market consensus of the shares as a buy remains in place despite the blistering outperformance overall.”
FTSE 100 - Risers
BP (BP.) 274.80p 8.42%
Rolls-Royce Holdings (RR.) 115.10p 7.57%
Antofagasta (ANTO) 1,226.00p 7.40%
Barclays (BARC) 150.20p 7.13%
Whitbread (WTB) 3,287.00p 6.69%
Lloyds Banking Group (LLOY) 39.50p 6.18%
Glencore (GLEN) 211.60p 5.97%
Royal Dutch Shell 'B' (RDSB) 1,326.20p 5.86%
BHP Group (BHP) 1,780.80p 5.84%
Anglo American (AAL) 2,311.50p 5.60%
FTSE 100 - Fallers
Homeserve (HSV) 1,047.00p -7.18%
JD Sports Fashion (JD.) 760.00p -6.50%
Intertek Group (ITRK) 5,682.00p -6.42%
Experian (EXPN) 2,723.00p -4.86%
Spirax-Sarco Engineering (SPX) 10,965.00p -4.78%
Croda International (CRDA) 5,860.00p -4.56%
Ocado Group (OCDO) 2,143.00p -4.50%
Pennon Group (PNN) 964.20p -3.96%
Reckitt Benckiser Group (RB.) 6,310.00p -3.66%
Rentokil Initial (RTO) 486.60p -3.57%
FTSE 250 - Risers
TUI AG Reg Shs (DI) (TUI) 546.60p 15.85%
SSP Group (SSPG) 357.00p 13.55%
Micro Focus International (MCRO) 371.70p 12.53%
Wood Group (John) (WG.) 315.70p 11.67%
Petrofac Ltd. (PFC) 174.60p 11.39%
Carnival (CCL) 1,328.50p 10.20%
Capita (CPI) 50.56p 8.40%
easyJet (EZJ) 840.00p 7.78%
IMI (IMI) 1,184.00p 7.64%
Babcock International Group (BAB) 354.90p 7.51%
FTSE 250 - Fallers
AO World (AO.) 379.00p -9.65%
Diploma (DPLM) 2,086.00p -5.44%
Dechra Pharmaceuticals (DPH) 3,176.00p -5.25%
Spirent Communications (SPT) 247.50p -5.17%
Frasers Group (FRAS) 452.00p -4.56%
Kainos Group (KNOS) 1,218.00p -4.40%
Games Workshop Group (GAW) 9,470.00p -3.96%
Ultra Electronics Holdings (ULE) 2,172.00p -3.72%
Hochschild Mining (HOC) 209.20p -3.51%
AJ Bell (AJB) 404.00p -3.35%