Vaccine provides shot in the arm to UK markets

Optimism over the potential for the economy to open up again, as it was revealed that 15 million people had been vaccinated by the NHS, helped send shares soaring on Monday.

Only two of 100 of London’s biggest firms that make up the FTSE 100 fell into negative territory, as the index was pulled upwards.

Gold and silver miner Fresnillo notched up the worst drop, at 0.4 per cent, in stark contrast to most of its mining rivals on the index, which crowded among the top winners for the day.

Glencore, Anglo American, Rio Tinto and BHP all closed more than 6 per cent higher on the day. They were joined by oil companies Shell and BP as well as some of the banks.

It helped push the index up by 2.5 per cent to 6,756.11, a rise of 166.32 points.

“Natural resource stocks are benefitting from the wider optimism that the global economy will recover and in turn, mineral demand will rise,” said CMC Markets analyst David Madden.

Oil demand also helped push the price of Brent crude oil up by around 1.5 per cent to 63.35 dollars per barrel.

Mr Madden added: “In light of the news that Britain is making great progress in terms of rolling out vaccines, there is chatter the country will begin to ease up on restrictions sooner rather than later.

“There is a growing sense the country will be allowed to slowly re-open in the next few weeks or months, which should spark economic activity.”

It was in part this which helped the FTSE 100 outperform its European counterparts. The Dax, which is Germany’s main index, closed up by 0.5 per cent, while the Paris-based Cac rose 1.5 per cent.

London’s top index was however unable to compare itself to its US peers, which were closed for Presidents’ Day.

Sterling gained around 0.4 per cent against both big rivals, buying 1.391 dollars or 1.147 euros by the close of play in London.

It was clear that investors were smiling on the UK’S travel companies. IAG, which owns British Airways, closed the day up 9.3 per cent - the best performer on the FTSE 100.

Firstgroup and National Express, which populate the FTSE 250, ended the day up around 11 per cent each, with Easyjet and cruise company Carnival not far behind. Other companies that have been heavily hit by the pandemic, such as Cineworld and Whsmith, also soared.