London open: Stocks rally on Brexit deal, US stimulus
London stocks rallied in early trade on Tuesday, taking their cue from an upbeat session in Asia and a strong close on Wall Street, as investors cheered a US stimulus package and the UK’s Brexit deal.
At 0825 GMT, the FTSE 100 was up 1.5% at 6,597.04, but volumes were expected to remain light, with many traders away from their desks until after the New Year.
Sentiment was boosted after US President Donald Trump signed a $2.3trn Covid relief and spending package, averting a partial government shutdown. The bill includes $900bn of Covid aid and $1.4trn in spending to fund government agencies.
Trump had previously criticising the bill for being "wasteful spending" and refused to sign it.
The mood was also lifted by news that EU ambassadors had on Monday given the green light for the Brexit trade deal to come into provisional force from 1 January. Official approval is expected later on Tuesday, with some countries, such as Sweden, still needing to consult their national parliament.
In equity markets, gains were broad-based, with British Airways and Iberia parent IAG was the top performer on the FTSE 100, while engine maker Rolls-Royce and InterContinental Hotels also gained.
Unsurprisingly, corporate news was scarce, but AstraZeneca rose sharply amid expectations that its Covid vaccine with Oxford University will be approved for use in the UK within days and after it said that it and Merck’s Lynparza treatment had been approved in Japan for the treatment of advanced ovarian, prostate and pancreatic cancers.
Insurer Admiral also advanced after agreeing to sell its Penguin Portals and Preminen comparison businesses, which include online portal Confused.com, to RVU - the comparison division of ZPG - in a deal valued at £508m.
Admiral said proceeds from the sale, net of minority interests and transaction costs, will be around £450m and that it intends to return a majority of this to shareholders "in light of the strong solvency and liquidity position of the group". It will also retain a portion to support investment in new business development over the coming years.
Market Movers
FTSE 100 (UKX) 6,597.04 1.46%
FTSE 250 (MCX) 20,719.66 0.84%
techMARK (TASX) 4,168.74 1.81%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 170.30p 4.22%
Diageo (DGE) 3,026.00p 3.84%
AstraZeneca (AZN) 7,497.00p 3.79%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,356.00p 3.75%
Rolls-Royce Holdings (RR.) 119.30p 3.07%
Smith (DS) (SMDS) 389.30p 3.02%
Smith & Nephew (SN.) 1,570.50p 2.95%
Mondi (MNDI) 1,759.00p 2.93%
Informa (INF) 563.20p 2.92%
Rightmove (RMV) 660.80p 2.77%
FTSE 100 - Fallers
Barclays (BARC) 152.94p -1.07%
NATWEST GROUP PLC ORD 100P (NWG) 168.30p -0.38%
Antofagasta (ANTO) 1,436.00p -0.28%
Sainsbury (J) (SBRY) 226.50p -0.09%
HSBC Holdings (HSBA) 386.00p 0.00%
RSA Insurance Group (RSA) 677.60p 0.03%
Evraz (EVR) 477.50p 0.04%
Glencore (GLEN) 235.20p 0.09%
Royal Dutch Shell 'B' (RDSB) 1,287.20p 0.17%
SEGRO (SGRO) 951.80p 0.21%
FTSE 250 - Risers
PureTech Health (PRTC) 399.50p 7.10%
TUI AG Reg Shs (DI) (TUI) 477.90p 5.87%
easyJet (EZJ) 871.00p 3.91%
Capita (CPI) 40.51p 3.87%
Chemring Group (CHG) 301.00p 3.79%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,356.00p 3.75%
Rank Group (RNK) 147.00p 3.67%
AO World (AO.) 419.50p 3.45%
Carnival (CCL) 1,401.50p 3.43%
Hammerson (HMSO) 27.92p 3.41%
FTSE 250 - Fallers
Wood Group (John) (WG.) 313.60p -3.21%
Cairn Energy (CNE) 209.80p -1.50%
Baillie Gifford US Growth Trust (USA) 328.00p -1.50%
Virgin Money UK (VMUK) 139.00p -1.07%
Ninety One (N91) 236.80p -1.00%
Allianz Technology Trust (ATT) 2,975.00p -1.00%
BMO Global Smaller Companies (BGSC) 143.20p -0.97%
Paragon Banking Group (PAG) 485.40p -0.90%
Avon Rubber (AVON) 3,155.00p -0.63%
Sirius Real Estate Ltd. (SRE) 95.00p -0.63%