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(Alliance News) - Stock prices in London opened sharply higher on Tuesday after the Christmas break, as the UK secured a trade agreement with the European Union, leading analysts to become more positive on the outlook for UK equities.
The FTSE 100 index was up 105.22 points, or 1.6%, at 6,607.33. The mid-cap FTSE 250 index was up 249.76 points, or 1.2%, at 20,796.44. The AIM All-Share index was up 1.1% at 1,140.33.
The Cboe UK 100 index was up 1.5% at 657.01. The Cboe 250 was up 0.9% at 18,094.40, and the Cboe Small Companies up 0.1% at 11,590.75.
In mainland Europe, the CAC 40 in Paris was up 0.3%, while the DAX 30 in Frankfurt was up 0.4%.
The UK will mark the dawn of a new era when the country leaves the EU at the end of the week, having reached an agreement which allows for continued tariff-free trade with the EU single market.
EU ambassadors have given provisional approval for Britain's post-Brexit trade deal, which will be implemented from Friday.
A spokesman for the German EU presidency said the ambassadors had unanimously agreed to "green light" the settlement hammered out on Christmas Eve. It comes as UK MPs were preparing to vote on the deal in a special sitting of Parliament called for Wednesday.
The agreement came as ministers stepped up calls for businesses and individuals to prepare for the new procedures that will apply in just four days' time, regardless of the agreement.
"Just before the proverbial clock struck midnight, a deal was sealed that will see the UK leave the EU customs union on January 1, 2021. The worst case scenario of trade in UK goods moving to WTO rules was averted, but the UK services sector may face some obstacles. The deal should see sentiment towards the FTSE indices recover just as the dividend payout ratio improves, vaccines are rolled out and overseas revenues accelerate. We lift UK equities to Bullish," said analysts at Jefferies.
In addition, US President Donald Trump signed into law the USD900 billion coronavirus relief bill and the USD1.4 trillion federal government budget on Sunday after days of delays, providing investors with more reasons to be upbeat heading into the new year.
In the FTSE 100, AstraZeneca was the best performer, up 4.0%, amid hopes the Anglo-Swedish drugmaker's coronavirus vaccine, created in partnership with Oxford University, will be rolled out imminently.
Over the weekend, the Sunday Telegraph reported the Oxford jab could be rolled out en masse from a few days into the New Year.
According to the newspaper, the UK government hopes that the approval could mean more than two million could receive their first dose of a coronavirus vaccine within a fortnight, with doses of the Oxford medicine available from January 4.
Further, AstraZeneca said Monday its Lynparza cancer treatment has secured approval in Japan for the treatment of advanced ovarian, prostate and pancreatic cancers.
Admiral Group was up 3.5%. The insurer said it has reached an agreement with ZPG Comparison Services Holdings UK's RVU business over the sale of the insurer's Penguin Portals and Preminen comparison businesses, for a total of GBP508 million.
Penguin Portals is made up of online comparison portals Confused.com, Rastreator.com and LeLynx.fr, technology operations Admiral Technologies and its 50% share of Preminen Price Comparison Holdings.
Cardiff-based Admiral expects net proceeds of around GBP450 million, with a majority of this to be returned to shareholders.
Elsewhere in London, THG Holdings was up 1.8% after the Hut Group owner said it has agreed to acquire US-based online skincare and specialty beauty brands retailer Dermstore.com, for USD350 million in cash from major retailer Target Corp, subject to US regulatory approval.
THG said the Dermstore.com acquisition provides the opportunity to accelerate the growth of its own beauty brands via a new and large US customer base.
In addition, THG acquired two of its long-standing UK-based nutrition product suppliers, Claremont Ingredients Ltd and David Berryman Ltd, for a combined purchase price of GBP59.5 million in cash.
The Japanese Nikkei 225 index closed up 2.7% on Tuesday. In China, the Shanghai Composite ended down 0.5%, while the Hang Seng index in Hong Kong finished up 1.0%.
The pound was quoted at USD1.3501 on Tuesday morning, down from USD1.3587 at the London equities close on Christmas Eve.
The euro was priced at USD1.2250, up from USD1.2197. Against the yen, the dollar was trading at JPY103.70, higher than JPY103.62.
Brent oil was quoted at USD51.25 a barrel Tuesday morning, higher than USD50.74 at the London equities close Thursday. Gold was priced at USD1,878.35 an ounce, up from USD1,874.60.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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