Vaccine hopes give markets ashotinarm
Thelondonmarketssurgedastraderswere hopeful following news of progress regarding two drugs firms’ efforts to produce a coronavirus vaccine.
Positive news from US biotechnology giant Moderna and suggestions that there has also been progress for the Oxford Covid-19 vaccine backed by Astrazeneca put a smile on the face of traders.
The FTSE 100 closed 112.9 points higher at 6,292.65. David Madden, market analyst at CMC Markets UK, said: “Stocks are driving higher on the back of optimism in relation to the possibility of a Covid-19 vaccine being developed. The bullish sentiment has rippled out across Europe, as the FTSE 100 briefly traded above 6,300, the [French] Cac40 hit its highest level since late March, and the [German] Dax 30 reached a mark last seen in late February.
“It is early days yet in regards to the development of a potential vaccine, but many traders are keen to buy into the market.”
Across the Atlantic, the Dow Jones opened higher after the bell as a strong showing by Goldman Sachs helped it trade the right side of 27,000 for the first time in five weeks.
Meanwhile, sterling moved higher after the Office for National Statistics revealed that inflation rose to 0.6 per cent in June.
The pound rose 0.22 per cent versus the US dollar at $1.258 and was up 0.18 per cent against the euro at €1.103.
The price of a barrel of Brent crude oil increased by 19 cents to $43.1 even though there is continued talk that Opec is keen to taper off from the record production cuts introduced in May.
Travel and hospitality stocks moved towards the top of FTSE as they particularly welcomed positivity surrounding the vaccine. In company news, fashion giant Burberry saw shares slide after it revealed plans to cut around 500 jobs in the UK and globally. It closed down by 87.5p to 1,470p.
Dixons Carphone closed down by 8.1p to 78.4p after it said annual profits more than halved despite a surge in online sales.
Online retailer Asos moved higher after it said it will repay furlough cash to the UK government on the back of a sales jump as house-bound shoppers bought more “lockdown products”. Its shares closed up 116p at 3,489p.