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(Alliance News) - Stock prices in Europe closed solidly in the green on Tuesday after a boost in sentiment which was sparked by hopes of an orderly transition of power in the US, news which also helped the Dow Jones Industrial Average on Wall Street breach the 30,000 mark for the first time.
Investors cheered news that US President Donald Trump's team will now work with President-Elect Joe Biden to begin his transition into the White House, adding to an already buoyant mood on optimism that Covid-19 vaccines could soon be rolled out across the globe.
The FTSE 100 index jumped 1.6%, or 98.33 points to close at 6,432.17. The FTSE 250 added 1.1%, or 207.21 points, at 19,789.56 but the AIM All-Share also slipped 0.2%, or 2.09 points, at 1,032.95.
The Cboe UK 100 index closed up 1.2%, or 7.75 points, at 639.60. The Cboe 250 ended up 1.1% at 17,180.42, and the Cboe Small Companies rose 1.0% to 11,531.92.
Trump came his closest yet to admitting election defeat Monday after the government agency meant to ease Biden's transition into the White House said it was finally lifting its unprecedented block on assistance.
Trump acknowledged it was time for the General Services Administration to "do what needs to be done." In the same tweet he insisted that he was still refusing to concede, saying: "Our case STRONGLY continues, we will keep up the good fight, and I believe we will prevail!"
"It took the US open for the markets to really display their delight at the start of the formal transition process to the Joe Biden administration this Tuesday," Spreadex analyst Connor Campbell said.
"Relief that the Democrats can hopefully hit the ground running when it comes to tackling Covid-19 in January, as well as the positive impact the pro-spending former Fed chair Janet Yellen is expected to make as Treasury Secretary, drove the Dow Jones to record highs."
The DJIA was up 1.4% at 30,005.58 points at the time of the closing bell in London, topping 30,000 points for the first time ever. The benchmark's record closing high is 29,950.44, achieved last week Monday.
Elsewhere in New York, the S&P 500 and Nasdaq Composite were up 1.4% and 0.9%.
In mainland Europe, the CAC 40 in Paris ended up 1.2%.
The DAX 30 in Frankfurt ended 1.3% higher to reach its highest level since February
The German stock index will grow by 10 companies and tighten entry rules following criticism over the spectacular collapse of former member Wirecard, operator Deutsche Boerse said Tuesday.
The changes, which come into effect in September 2021, will raise the flagship index from 30 to 40 members, and require new entrants to have made an operating profit over the last two years. They will also be required to publish their audited financial reports.
The pound was quoted at USD1.3357 at the London equities close on Tuesday, improved from USD1.3289 on Monday. The euro stood at USD1.1882, up from USD1.1821. Against the Japanese yen, the dollar was trading at JPY104.62, improved from JPY104.52.
Brent oil was sharply higher at USD47.68, but earlier reached USD48.00 - the most a barrel of the commodity has fetched since March. A barrel of the North Sea benchmark was quoted at USD45.78 at the London equities close on Monday.
On the London Stock Exchange, oil majors were on the up on Tuesday, BP rose 8.4% while Royal Dutch Shell 'A' and 'B' shares both climbed 5.7%
"Expectations for relatively rapid deployment of the Covid-19 vaccine continue to support wider markets, oil and oil equities, outweighing for now some of the recent signs of tensions within OPEC ahead of the meeting next week. It seems the market expectation is still that OPEC+ will extend the current phase of production cuts by at least three months and that major producers like Saudi Arabia will continue to support good aggregate compliance to offset slippage elsewhere within the group," axi Chief Global Markets Strategist Stephen Innes said.
Gold prices were lower however, an ounce of the precious metal fetched USD1,805.23, down from USD1,8333.31 on Monday.
"The shiny metal has fallen out of favour because of reduced demand for haven assets as investors look forward to more normal times ahead in 2021 with the developments of the vaccines," ThinkMarkets analyst Fiona Cincotta said, but added the precious metal's outlook is not all gloomy.
"With a recovering global economy, jewellery demand should pick up to offset some of the weakness arising from the investment side. Inflation is expected to pick up sharply if the global recovery accelerates. This should be good news for gold, traditionally a good inflation hedge."
JD Sports finished towards the bottom of the blue-chips, down 6.5% amid speculation that it is in exclusive talks to buy UK department store chain Debenhams.
The Times reported the athleisurewear retailer is interested in buying the whole of Debenhams and on Monday entered exclusive talks with Lazard, its adviser, and administrators at FRP. JD Sports is thought to be attracted to Debenhams because of its website, The Times reported.
Copper miner Antofagasta rose 7.4% after Jefferies raised the stock to Buy from Hold.
Among the mid-caps, travel stocks got a boost after UK Transport Secretary Grant Shapps said he wanted to phase out quarantines by replacing it with daily coronavirus tests.
Travellers arriving in England will be able to end their quarantine period with a negative coronavirus test after five days from December 15, Shapps announced. The travel industry welcomed the policy but described it as "long overdue".
SSP Group, the owner of the Upper Crust chain and operator of concessions in airports as well as railway stations, jumped 14%. Tour operator Tui rose 15% and cruise ship firm Carnival grew 11%.
At the other end of the mid-caps, AO World gave back 9.9%, despite the online household appliances retailer swinging to an interim profit after closing its Dutch operation and recording strong revenue growth in the UK and Germany.
AO World said pretax profit in the six months ended September 30 was GBP18.3 million, versus a loss of GBP5.9 million a year earlier. Total revenue, excluding its shuttered Netherlands operation, rose 58% to GBP717.0 million from GBP454.9 million.
The company's online-focused model lends itself to bumper trading during lockdown measures, as opposed to bricks and mortar retailers which were been forced to close stores. The prospect of a return to normality and an end to virus restrictions sent AO World shares lower.
"For the group as a whole, there may be some doubts as to whether the exponential growth can be maintained post-pandemic as bricks and mortar competitors find their feet once more, while the financial impacts of Covid-19 and Brexit are likely to lead the UK towards some turbulent economic times," interactive investor analyst Richard Hunter noted.
Outside of the Main Market, AIM-listed video game services provider Keywords Studios gained 2.2% as it expects annual revenue to meet internal forecasts and adjusted pretax profit to top consensus.
Revenue for 2020 is expected to be in line with company compiled consensus of EUR367 million, versus EUR326.5 million in 2019. Adjusted pretax profit is expected to be "significantly" ahead of the EUR46 million consensus, Keywords said, at EUR52 million.
On Tuesday, UK Chancellor Rishi Sunak delivers his one-year spending review. Sunak is due to address the Commons on Wednesday to set out where money will be spent and cut back as the UK deals with the economic shock of Covid-19.
In the afternoon, initial jobless claims data from the US is released at 1330 GMT, a day earlier than usual due to the Thanksgiving holiday on Thursday.
The local corporate calendar has half-year results from banknote print De La Rue as well as aerospace and defence firm Babcock International. Industrial turnaround specialist Melrose Industries releases a trading statement.
By Eric Cunha; ericcunha@alliancenews.com
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