London close: Stocks firmer on hopes for Covid-19 treatments
London stocks closed higher on Monday, with sentiment boosted by fresh hopes of a coronavirus treatment.
The FTSE 100 ended the session up 1.781% at 6,104.73, and the FTSE 250 was 0.61% firmer at 17,685.07.
Sterling was weaker at the end of the trading day, falling 0.17% against the dollar to $1.3068 and losing 0.27% on the euro to €1.1068.
“Investors have been keen to pile into European stocks due to their laggard status, hoping that some of the magic dust that has been sprinkled on US equities - and on tech stocks in particular - will rub off on the lacklustre indices on this side of the Atlantic,” said IG chief market analyst Chris Beauchamp.
“On a day where economic news has been sparse, the focus has been on hopes that further progress in vaccines might yield results earlier than expected, but with much of the S&P 500 actually struggling to make headway the gains are mostly down to the usual few suspects.
“This is a feature, not a bug, of bull markets - most stocks in an index tend to lag behind overall, while the winners keep on winning.”
The mood was also lifted by a report suggesting that Trump is considering seeking another FDA ‘emergency-use authorisation’ for the coronavirus vaccine being developed by AstraZeneca and Oxford University.
AstraZeneca shares closed up 2.06% on the news.
Elsewhere, BT was ahead 7.07% following a report over the weekend that the company had asked bankers at Goldman Sachs to update its bid defence strategy following a collapse in the share price.
According to Sky News, BT is preparing to defend itself against takeover approaches from industry rivals and buyout firms after the suspension of its dividend sent the shares tumbling to their lowest level in more than a decade.
“At a valuation of £10bn, the group has become a definite target,” said Neil Wilson, chief market analyst at Markets.com.
“And whilst BT has a lot of legacy baggage - notably £18bn in net debt and a major pension deficit - it’s also got the Openreach crown jewel, which would be worse considerably more on its own than the group is valued today.”
Wilson noted that there was no formal offer, but said shares could jump further if one emerged.
“Deutsche Telekom, which owns 12% in BT, is seen as a likely candidate.
“The question is whether there could be more bombed out UK-listed stocks that could be taken out by a timely takeover … perennial rumour-favourite ITV, for instance?”
Distribution and services group Bunzl rose 3.16% after posting a rise in first-half profit, reinstating its dividend and announcing the acquisition of a US-based safety business and a flexible packaging distributor in Ireland.
Aerospace and defence engineer Meggitt gained 4.35% after signing a multi-million pound contract with Japan’s Modec - a specialist of floating production systems for the offshore oil and gas industry - for the supply of pioneering printed circuit heat exchanges.
Cineworld was 6.84% higher as Peel Hunt said the stock presents "an attractive buying opportunity" for investors with an appetite for material risk.
The broker, which rates Cineworld at ‘buy’ with a 180p price target, said the shares should "bounce hard" once investors are reassured over demand.
Market Movers
FTSE 100 (UKX) 6,104.73 1.71%
FTSE 250 (MCX) 17,685.07 0.61%
techMARK (TASX) 3,832.08 1.62%
FTSE 100 - Risers
BT Group (BT.A) 109.00p 7.07%
Melrose Industries (MRO) 103.70p 4.77%
ITV (ITV) 62.72p 4.29%
Royal Dutch Shell 'A' (RDSA) 1,163.20p 4.00%
Royal Dutch Shell 'B' (RDSB) 1,115.40p 3.74%
British American Tobacco (BATS) 2,620.00p 3.72%
Imperial Brands (IMB) 1,299.00p 3.67%
Johnson Matthey (JMAT) 2,377.00p 3.57%
Smurfit Kappa Group (SKG) 2,774.00p 3.43%
BP (BP.) 282.00p 3.16%
FTSE 100 - Fallers
GVC Holdings (GVC) 771.20p -1.91%
Flutter Entertainment (FLTR) 12,135.00p -1.22%
Fresnillo (FRES) 1,219.00p -1.22%
Whitbread (WTB) 2,370.00p -1.17%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,824.00p -0.90%
Homeserve (HSV) 1,328.00p -0.67%
SEGRO (SGRO) 964.00p -0.39%
Hargreaves Lansdown (HL.) 1,683.00p -0.30%
Tesco (TSCO) 227.00p -0.22%
Sainsbury (J) (SBRY) 187.90p -0.13%
FTSE 250 - Risers
Oxford Instruments (OXIG) 1,630.00p 10.58%
Cineworld Group (CINE) 54.64p 6.84%
Carnival (CCL) 985.20p 6.58%
Wood Group (John) (WG.) 233.90p 6.46%
Fisher (James) & Sons (FSJ) 1,218.00p 4.77%
Avon Rubber (AVON) 3,760.00p 4.74%
Pets at Home Group (PETS) 295.20p 4.68%
Meggitt (MGGT) 292.40p 4.35%
Cairn Energy (CNE) 136.40p 4.12%
FDM Group (Holdings) (FDM) 1,036.00p 4.00%
FTSE 250 - Fallers
Calisen (CLSN) 165.65p -7.02%
Bank of Georgia Group (BGEO) 894.00p -3.46%
John Laing Group (JLG) 284.00p -3.20%
Wetherspoon (J.D.) (JDW) 944.00p -3.08%
Workspace Group (WKP) 570.50p -2.98%
Just Group (JUST) 49.58p -2.78%
Domino's Pizza Group (DOM) 335.00p -2.39%
St. Modwen Properties (SMP) 310.00p -2.21%
Mitchells & Butlers (MAB) 167.00p -2.13%
CLS Holdings (CLI) 193.80p -2.12%