London open: Stocks rise on vaccine, US stimulus hopes

London stocks rose in early trade on Wednesday, with sentiment underpinned by vaccine optimism and US stimulus hopes.

At 0845 GMT, the FTSE 100 was up 0.6% at 6,556.06.

Spreadex analyst Connor Campbell said markets were being lifted "by the same news that has been the bedrock of any growth seen in 2021".

"There were multiple positive headlines related to vaccines. A study has shown that one dose of the Oxford/AstraZeneca preparation provides protection against Covid for at least three months, while cutting transmission by 67%. At the same time a partnership has been announced between AstraZeneca’s FTSE 100 rival GlaxoSmithKline and CureVac, to develop the new generation of vaccines to tackle covid-19 variants.

"On the stimulus front, the Senate voted 50 to 49 to begin the process of budget reconciliation, meaning the Democrats can push through the package without needing to bring 10 Republicans over to their side of the table. It’s the best option for the markets, as it should preserve the scale of the $1.9 trillion plan.

"Plenty, then, for investors to feel happy about. As long as they continue to keep the blinkers on regarding the short- and long-term economic impact of the pandemic."

On the data front, investors will be eyeing Markit’s UK services PMI for January at 0930 GMT.

In equity markets, Vodafone rallied as it said it was confident about the full-year outlook after its German business drove a return to organic growth in the third quarter.

Aviva advanced after an upgrade to ‘overweight’ at Morgan Stanley, while Upper Crust owner SSP was boosted by an upgrade to ‘buy’ at Berenberg.

Elsewhere, housebuilders Persimmon and Taylor Wimpey were lifted by upgrades to ‘overweight’ at Barclays, while Redrow was higher on the back of a positive note from JPMorgan.

GlaxoSmithKline ticked up after it and CureVac announced a new €150m collaboration to develop a vaccine to combat emerging variants of Covid-19.

Unite Group fell after it announced a three-week extension to its 50% student discount and said the move would cost it £6m in lost revenue. It was also hit by a downgrade to ‘underweight’ at Barclays.

Market Movers

FTSE 100 (UKX) 6,556.06 0.60%
FTSE 250 (MCX) 20,781.09 0.44%
techMARK (TASX) 4,141.57 0.70%

FTSE 100 - Risers

Vodafone Group (VOD) 131.14p 2.95%
Aviva (AV.) 353.80p 2.76%
Persimmon (PSN) 2,722.00p 2.37%
Taylor Wimpey (TW.) 157.90p 2.17%
Compass Group (CPG) 1,386.50p 1.95%
Pennon Group (PNN) 971.60p 1.76%
Informa (INF) 535.40p 1.67%
Scottish Mortgage Inv Trust (SMT) 1,321.00p 1.62%
NATWEST GROUP PLC ORD 100P (NWG) 157.45p 1.61%
Legal & General Group (LGEN) 256.60p 1.58%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 92.84p -2.03%
Melrose Industries (MRO) 176.05p -1.18%
BP (BP.) 252.30p -1.06%
Fresnillo (FRES) 1,016.00p -0.78%
Mondi (MNDI) 1,781.50p -0.59%
Evraz (EVR) 500.00p -0.56%
Entain (ENT) 1,277.00p -0.51%
Johnson Matthey (JMAT) 2,980.00p -0.50%
Smurfit Kappa Group (SKG) 3,618.00p -0.50%
Royal Dutch Shell 'A' (RDSA) 1,312.60p -0.32%

FTSE 250 - Risers

Virgin Money UK (VMUK) 153.00p 7.75%
SSP Group (SSPG) 324.00p 5.88%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 435.00p 3.33%
Capita (CPI) 37.90p 3.13%
Redrow (RDW) 550.50p 2.90%
Wetherspoon (J.D.) (JDW) 1,252.00p 2.71%
IMI (IMI) 1,300.00p 2.60%
Hammerson (HMSO) 22.45p 2.51%
easyJet (EZJ) 790.60p 2.28%
C&C Group (CCR) 239.50p 1.91%

FTSE 250 - Fallers

Unite Group (UTG) 955.50p -2.95%
BlackRock World Mining Trust (BRWM) 524.00p -2.60%
PZ Cussons (PZC) 243.00p -2.21%
Aston Martin Lagonda Global Holdings (AML) 2,235.00p -1.67%
Hochschild Mining (HOC) 224.80p -1.32%
Avon Rubber (AVON) 3,090.00p -1.12%
Cineworld Group (CINE) 74.44p -1.04%
Capital & Counties Properties (CAPC) 132.50p -0.97%
Derwent London (DLN) 3,146.00p -0.94%
TR Property Inv Trust (TRY) 386.00p -0.90%