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(Alliance News) - Stocks in London ended sharply higher on Friday as investors cheered the latest positive development in the fight against the coronavirus pandemic.
Gilead Sciences said late Thursday its antiviral drug Veklury, also known as remdesivir has been approved by the US Food & Drug Administration for the treatment of Covid-19.
The drug can now be used for adults and paediatric patients for the treatment of Covid-19 during hospitalisation, and the FDA has also issued an emergency use authorisation for the use of remdesivir to treat patients under 12 years old. The stock was 1.4% higher on Wall Street.
The FTSE 100 index closed up 74.63 points, or 1.3%, at 5,860.28, ending the week up 0.5%.
The FTSE 250 ended up 215.15 points, or 1.2%, at 18,109.57, ending the week up 1.5%.
The AIM All-Share closed down 10.09 points, or 1.0%, at 979.10, ending the week up 0.8%.
The Cboe UK 100 ended up 1.1% at 581.65, the Cboe 250 closed up 1.4% at 15,327.46, and the Cboe Small Companies ended up 1.7% at 9,660.28.
In Paris the CAC 40 ended up 1.0%, while the DAX 30 in Frankfurt ended 0.8%.
"The major European equity markets are showing strong gains. Sentiment has been lifted by last night's news that Remdesivir, an antiviral drug produced by Gilead Sciences, received approval as a treatment by the US regulator, the FDA. For much of the week, stocks in Europe have incurred declines because of concerns about the health crisis and sticker restrictions. The absence of a US coronavirus relief package in the US was a factor too. Traders are content to buy back into the market now that some progress has been made in tackling the health crisis," said CMC Markets analyst David Madden.
In the FTSE 100, Barclays ended up 7.0% after the lender delivered a "resilient" performance in the third quarter of 2020, boasting that its "diversified" business allowed the lender to remain profitable during the Covid-19 pandemic.
Barclays said pretax profit for the three months ended September came in at GBP1.15 billion, up sharply from GBP246 million a year earlier, bumping up its return on tangible equity to 5.1% from 2.4%.
The improvement was driven by a GBP1.6 billion payment protection insurance related charge that was taken in the third quarter of last year and not repeated in the recent quarter.
Fellow banks Lloyds Banking Group, HSBC Holdings and NatWest - which all report next week - closed up 4.9%, 4.7% and 3.2% respectively.
"Strength in UK stocks has been helped by an impressive Barclays earnings report. With the bank lowering Covid impairment charges, there is a chance the fears of an economic collapse in fourth quarter could be overblown," said IG Group's Josh Mahony.
At the other end of the large caps, Pearson ended the worst performer, down 1.7%. The education publisher addressed a significant shareholder vote against the re-election of Non-Executive Director Michael Lynton, stating it believes Lynton effectively carries out his duties.
The FTSE 100 publishing company noted that while over 20% of shareholders voted against his re-election at the annual general meeting on April 24, around 68% of shareholders voted in support of Lynton.
Pearson stated that while a "significant minority" of shareholders said they voted against his re-election because they believe Lynton has too many non-Pearson commitments including in other listed firms, the company believes he effectively discharges his role as a director.
InterContinental Hotels Group closed down 1.5% after the hotelier said it has seen a quarterly improvement in revenue per available room but noted this was still significantly lower than a year prior.
For its third quarter ended September 30, the FTSE 100-listed hotel operator stated its decline in RevPAR eased to 53% compared to 75% in the second quarter, leaving the year-to-date figure down 52%.
Occupancy climbed to 44% from 25%. A total of 199 hotels, or 3% of the group's estate, remained closed as at September-end.
London Stock Exchange Group closed down 0.9%. The exchange operator reported a "resilient" third quarter with revenue largely flat but said it is continuing to progress its ongoing attempted USD27 billion Refinitiv acquisition.
For the three months ended September, gross profit was up 4% to GBP551 million from GBP529 million.
Revenue climbed 1% year-on-year to GBP524 million from GBP521 million. Total income, including its CCP business, climbed 2% to GBP600 million from GBP587 million.
Turning to its ongoing Refinitiv deal, Chief Executive David Schwimmer said: "We are making good progress on the highly attractive Refinitiv transaction, having secured further regulatory approvals around the world. We continue to engage constructively with the European Commission and believe the potential divestment of the Borsa Italiana group will contribute significantly to addressing the EU's competition concerns."
The pound was quoted at USD1.3050 at the London equities close, down from USD1.3095 at the close Thursday, after disappointing UK purchasing managers' index numbers.
The UK's private sector suffered a "considerable" decline in growth in October, flash figures from IHS Markit showed, with the hospitality sector particularly struggling due to local lockdowns.
According to IHS Markit/CIPS survey data, the manufacturing sector also saw growth ease. The UK manufacturing output index slipped to 56.4 points, a four-month low, down from the final September figure of 59.0. The number remains above the 50.0 mark which separates growth from decline, however.
The UK's manufacturing purchasing managers' index fell to 53.3 in October, according to flash figures, a three-month low and down from 54.1 in September.
The euro stood at USD1.1840 at the European equities close, up from USD1.1825 late Thursday, on the back of the latest PMI figures from the continent.
The flash reading eurozone manufacturing PMI reading was a 26-month high of 54.4 in October, up from 53.7 in September. The flash eurozone manufacturing PMI output index rose to 57.8 from 57.1.
Manufacturing output growth accelerated to its fastest since February 2018, supported by inflows of new orders surging at the quickest rate since January 2018. Conversely, service sector output fell for a second successive month, deteriorating at the sharpest rate since May.
Against the yen, the dollar was trading at JPY104.80, flat from JPY104.83 late Thursday.
Stocks in New York were mixed at the London equities close amid the continued absence of a US stimulus deal from Washington.
The DJIA was down 0.1%, the S&P 500 index was up 0.1% and the Nasdaq Composite was down 0.4%.
After days of ups and downs in the months-long, deadlocked negotiations, there were more comments indicating policymakers in Washington were nearer to securing a deal on another stimulus package with little time remaining before the November 3 presidential election.
The White House's economic director Larry Kudlow told Bloomberg "the ball's not moving much right now" on negotiations over an additional round of federal stimulus, even as coronavirus cases spike in parts of the country raising the prospect of further shutdowns.
In addition, uncertainty over the election was weighing on sentiment following Thursday's presidential debate between incumbent Donald Trump and Democratic challenger Joe Biden in Nashville, Tennessee.
Trump and Biden traded accusations of graft and clashed on the Covid-19 pandemic Thursday but without landing a knockout blow 12 days before the election in a final debate that many saw as Trump's last big chance to change the narrative.
Arguably, the most startling aspect of the debate in Nashville, Tennessee, turned out to be the relative civility compared to the disastrous first debate last month when Trump spent much of the time shouting frontrunner Biden down.
This time, Trump called his Democratic opponent "Joe" and even lauded the moderator Kristen Welker of NBC News, who had a mute button to keep order, saying: "I respect very much the way you're handling this, so far."
The most heated early exchanges were over mutual accusations of graft.
With the election two weeks away, some 45 million Americans are estimated to have joined an unprecedented wave of early voting and polls indicate that almost all voters have already firmly made up their minds. Biden is steadily ahead, with the Quinnipiac University national poll, released Thursday, putting him up at 51% to Trump's 41%.
"The concern is that, though a Joe Biden victory would potentially lead to a larger stimulus bill, it would also leave tight-fisted Republicans with little impetus to do anything that might help the incoming President during the 'lame-duck' period between November and January. And that could mean no economic relief until the New Year," said Spreadex analyst Connor Campbell.
Brent oil was quoted at USD42.25 a barrel at the London close, lower from USD42.70 at the close Thursday.
Gold was quoted at USD1,900.50 an ounce at the London equities close, marginally higher against USD1,898.00 late Thursday.
The economic events calendar on Monday has US new home sales at 1500 GMT. In addition, on Sunday morning, British summer time comes to an end at 0200 BST and UK time reverts back an hour to observe Greenwich mean time.
The UK corporate calendar on Monday has third quarter results from THG Holdings.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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