Europe open: Shares kick off 2021 higher on Brexit, vaccine optimism
European shares started the first session of the year in bright fashion, driven by the Brexit trade agreement and roll out of coronavirus vaccines across the region.
The pan-European STOXX 600 index was up 0.97%. The UK’s FTSE 100 rose 1.87% in the first trading day of Britain’s existence outside the European Union. This was despite the nation heading for tougher Covid-19 lockdown measures after a surge in cases – with the government predictably wavering on when to introduce them.
“These gains can be tied to the rollout of the Oxford/AstraZeneca vaccine in the UK – the continuation of 2021’s great hope for ending the coronavirus pandemic. It is another step on the journey back to normality, and investors have seized upon it with all their might,” said Spreadex analyst Connor Campbell.
The German DAX was up 0.42% and French CAC rose 0.98%. Dow Jones futures were up 94 points.
“It is a trickier first week of 2021 than the US index would like. Tuesday sees the Senate runoff elections in Georgia, a pair of races arguably as important as the nationwide vote. For tomorrow’s winners will dictate whether the Democrats or Republicans take control of the upper chamber, and therefore have huge implications for the Biden administration’s ability to get things done. And for the markets, that means further covid-19 stimulus,” Campbell said.
While the FTSE was up on Brexit deal optimism, there was still some concern about the fact that a deal was not agreed on financial services, which make up 80% of the UK economy. Shares in banks such as Lloyds, Barclays and Natwest were all lower.
Elsewhere in equity news, shares in Ladbrokes owner Entain topped the gainers, up 25.5% despite rejecting an $11bn bid proposal from US casino operator MGM Resorts, saying it significantly undervalued the business.