10th Nov 2020 17:14
(Alliance News) - Stocks in London closed higher on Tuesday, with news that distribution of a Covid-19 vaccine in the UK could start by Christmas.
The FTSE 100 index closed 1.8%, or 110.56 points higher at 6,296.85. The FTSE 250 ended 0.9%, or 177.98 points higher, at 19,028.34, and the AIM All-Share closed 0.1%, or 0.68 of a point higher, at 985.08.
The Cboe UK 100 index closed up 1.9% at 627.84. The Cboe 250 ended 1.4% higher at 16,304.96. The Cboe Small Companies gained 3.3% at 10,548.41.
Joshua Mahony, senior market analyst at IG, said: "The shift out of momentum stocks has continued apace today, with yesterday's vaccine breakthrough from Pfizer seeing liquidity shifting into value. Despite lagging behind the pack for much of this recovery, the FTSE 100 looks set to outperform its US counterparts as the lack of tech stocks and wealth of value stocks finally provides a benefit. With less than a week gone since the country entered a nationwide lockdown, the value composition of UK stocks will likely lead to outperformance over the coming months."
A coronavirus vaccine could start being distributed by Christmas after a jab developed by pharmaceutical giant Pfizer cleared a "significant hurdle".
UK Prime Minister Boris Johnson said initial results suggested the vaccine was 90% effective at protecting people from Covid-19 but warned these were "very, very early days".
Deputy Chief Medical Officer Jonathan Van-Tam told a Downing Street press conference he was "hopeful" there would be "some vaccine by Christmas".
He said: "Frankly, we're in the middle of the second wave, and I don't see the vaccine making any difference for the wave we are now in. I'm hopeful that it may prevent future waves, but this one we have to battle through to the end without a vaccine. I am hopeful because of all that, but not yet certain that we could begin to see some vaccine by Christmas."
The UK government has ordered 40 million doses of the Pfizer vaccine – enough for about a third of the UK population.
Government figures show 49,238 people have died in the UK within 28 days of testing positive for Covid-19 and the number of cases has reached 1,213,363.
Croda International shares ended 7.0% higher on news it has agreed a deal to supply Pfizer with novel excipients to aid in the manufacturing of the US firm's promising Covid-19 vaccine candidate.
Speciality chemical company Croda said it will supply Pfizer with four component excipients during the first three years of the five-year pact. Excipients are substances used in the manufacturing of vaccines as bulking agents.
"The contribution from this contract is already included in Croda's trading expectations for 2020, including in its guidance of the impact of the Avanti acquisition. If Pfizer's publicly indicated vaccine doses for 2021 were to be required, the sales value of Croda's contract in 2021 could be of the order of USD100 million," the FTSE-100 listed firm said.
Persimmon ended 3.9% lower after it announced the payment of a further interim dividend following a "continuing strong performance" as sales rates remain ahead of the year prior.
The York, England-based housebuilder said trading through the summer weeks was "robust" as sales rates remained strong due to good availability of homes at an advanced stage of construction.
From July 1 to November 9, average private weekly sales rates per site was 38% higher than a year prior, driven by the strength of the group's gross sales levels.
Persimmon said that it expects legal completions in the second half of 2020 to be in line with the second half of the year prior.
Persimmon declared a further interim dividend of 70 pence per share "reflecting the group's continuing strong performance".
This, together with the previously paid interim dividend of 40p per share, replaces the postponed 110p per share final dividend declared for 2019, the company said.
Land Securities shares closed up 4.0%. It reported a wider interim loss and a fall in net asset value, though did reinstate its dividend.
Net asset value per share fell 9.6% to 1,068 pence at the end of September versus 1,182p a year ago.
Revenue fell to GBP327 million from GBP369 million, and LandSec's pretax loss widened sharply to GBP835 million from GBP147 million.
More positively, the commercial property developer reinstated its dividend alongside Tuesday's results.
The company said it is resuming quarterly dividends - after suspending payouts in April in order to conserve cash - commencing with a 12p payment in January, representing an aggregated payment for the first two quarters of the year. LandSec paid out an interim dividend of 23.2p for the first half of 2019.
In Paris the CAC 40 ended 1.6% higher, while the DAX 30 in Frankfurt ended 0.5% higher.
Controversial measures which tear up parts of the Brexit divorce agreement will not return to the Commons until the end of November at the earliest.
Peers, including dozens of senior Tories, voted to strip controversial clauses from the UK Internal Market Bill that would enable ministers to set aside key parts of the Withdrawal Agreement signed with the EU, breaking an international treaty.
The government has said that it still wants the measures, which have soured relations with the EU and the US President-Elect Joe Biden, and members of parliament would be asked to put them back in the legislation.
But by delaying until the end of November, UK Prime Minister Boris Johnson will know whether progress has been made on a UK-EU trade deal which could take the heat out of the row with Brussels.
On Monday night the government suffered a 268-vote defeat over one element of the Bill, with 44 rebels including former Tory leader Michael Howard, ex-Brexit minister George Bridges and former chief whip George Young.
But Downing Street said the measures represented a "legal safety net" to ensure free-flowing trade between Great Britain and Northern Ireland.
The prime minister's stance is unlikely to improve relations with the incoming US president.
Biden, who has Irish ancestry, warned during his successful campaign against Donald Trump that a future UK-US trade deal with the US was "contingent" on the prevention of a return to a hard border on the island of Ireland.
Biden warned the Good Friday Agreement cannot "become a casualty of Brexit".
The EU wants a trade deal with the UK to be reached by mid-November in order to allow time for it to be ratified by the end of the year, when transition arrangements expire.
Brussels' negotiator Michel Barnier is holding talks in London this week with his counterpart David Frost.
This was not the only discouraging UK news on Tuesday. The unemployment rate in the UK rose to 4.8% for the quarter ending September 30, the National Statistics Office said, in line with expectations.
The UK unemployment rate was 0.9 of a percentage point higher than a year earlier and 0.7 of a percentage point up from the second quarter of 2020.
For July to September 2020, an estimated 1.6 million people were unemployed, up 318,000 on a year before and up 243,000 on the previous quarter.
The annual increase was the largest since December 2009 to February 2010, and the quarterly increase was the largest since March to May 2009. Market consensus, according to FXStreet, forecast the rate at 4.8%.
The pound was quoted at USD1.3224 at the London equities close, up from USD1.3131 at the same time on Monday.
The euro stood at USD1.1817 at the European equities close, firm from USD1.1815 a day before.
Against the yen, the dollar was trading at JPY105.27, down from JPY105.57 late Monday.
Brent oil was higher, quoted at USD43.08 a barrel at the equities close from USD42.46 at the same time the prior day.
Gold strengthened on Tuesday after Monday's vaccine news sparked a sell-off in the safe haven asset. An ounce of the precious metal was quoted at USD1,882.66 an ounce at the London equities close against USD1,853.81 on Monday.
Stocks in New York were mixed at the London equities close. The DJIA was 0.5% higher, the S&P 500 index 0.4% lower, and the Nasdaq Composite was down 1.3%.
The economic calendar for Wednesday is fairly sparse. The European Central Bank forum on central banking opens Wednesday, and at 0600 GMT a preliminary Japanese machine tool orders print is due.
The corporate calendar is more lively, with half-year results due from property investor Great Portland Estates and office space provider Workspace Group.
Blue-chip soft drink bottler Coca-Cola HBC puts out a trading statement Wednesday and pub chain JD Wetherspoon releases first quarter results.
By Anna Farley; [email protected]
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