Barclays Share News (BARC)

(Alliance News) - Stocks got a boost on Monday as the UK and EU agreed to continue talks over post-Brexit trade, with banks and housebuilders rallying on renewed hopes that a no-deal departure will be avoided as the end of 2020 looms.

The FTSE 100 index was up 34.52 points, or 0.5%, at 6,581.27 on Monday. The mid-cap FTSE 250 index was up 358.88 points, or 1.8%, at 19,981.03. The AIM All-Share index was up 0.6% at 1,067.82.

The Cboe UK 100 index was up 0.5% at 655.61. The Cboe 250 was up 2.2% at 17,279.75, and the Cboe Small Companies up 0.6% at 11,250.63.

"Fears that the Sunday deadline for negotiations could lead to a decision to abandon talks altogether have been allayed for now. With less than three-weeks left until the UK leaves the EU, brinkmanship is going to have to move aside in favour of compromise if a deal is going to pass before year-end," said Joshua Mahony, senior market analyst at IG.

Talks were extended on Sunday after UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to continue the process despite major differences still remaining.

Sunday's deadline for a decision on the future of the talks saw Johnson and von der Leyen agree to "go the extra mile" in search of a solution.

Johnson, speaking after the call, said the UK would not be walking away from the negotiating table and that "where there is life, there is hope". But he continued to warn that a no-deal outcome was still the most likely scenario.

Brussels' chief negotiator Michel Barnier has insisted a trade deal between the UK and EU is still possible. "There might now be a narrow path to an agreement visible – if negotiators can clear the remaining hurdles in the next few days," an EU diplomat said on Monday after a briefing from Barnier.

IG's Mahony said: "From a traders perspective, the prospect of a potential breakthrough does provide some floor for the pound for the time being."

Sterling was quoted at USD1.3433 on Monday, up 1.6% from USD1.3217 at the London equities close on Friday. The euro rose 0.4% to USD1.2153 versus USD1.2110 late Friday.

In mainland Europe, the CAC 40 in Paris was up 1.1% while the DAX 30 in Frankfurt was up 1.2% Monday afternoon.

Hopes that a no-deal Brexit will be averted helped domestically exposed stocks in London. Banks rallied, with NatWest up 7.3%, Barclays up 5.9% and Lloyds up 5.8%.

Housebuilders also advanced, with Taylor Wimpey up 6.1%, Persimmon up 5.6% and Barratt Developments up 5.1%.

As well as Brexit hopes, homebuilders were bolstered after Rightmove said that demand for housing in the UK will outweigh consumer uncertainty in 2021. Prices are expected to grow by a single-digit percentage, though slightly slower than in 2020.

In the Rightmove monthly house price index, the property portal forecast the national average price to grow by 4% in 2021 as "housing priorities stay high on people's life agendas". UK house prices rose by 6.2% in 2020, according to Rightmove.

In the US, stocks are pointed towards a higher start. The Dow Jones is called up 0.8%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.4%.

Talks on new economic relief for millions of Americans hit hard by the Covid-19 pandemic are set to continue Monday in Washington between the White House and Congress, with less than two weeks to go before a previous plan expires.

US Treasury Secretary Steven Mnuchin and Speaker of the House of Representatives Nancy Pelosi spoke on the phone for a half-hour on Sunday, according to a tweet by the top Democrat's spokesman Drew Hammill, and plan to speak again on Monday.

A group of Democratic and Republican lawmakers have proposed a bailout of USD908 billion, which has served as the base for negotiations. The Trump administration on Tuesday proposed an increased bailout of USD916 billion, but it was later rejected by Democrats, who refused to accept its inclusion of a cut to unemployment benefits.

In New York, shares in Alexion Pharmaceuticals were up 32% in pre-market trade. London-listed peer AstraZeneca said Saturday it was buying US biotech firm Alexion for USD39 billion to boost its work on immunology.

AstraZeneca was the worst performer in London's FTSE 100 on Monday, down 6.5%.

"Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases," AstraZeneca Chief Executive Pascal Soriot said in a statement, announcing the year's biggest deal in the pharma sector.

Both boards have agreed to the cash-and-stock deal, which values Alexion at USD175 a share, a premium of 45% to the Boston-based company's closing price on Friday in New York of USD120.98. The new acquisition is expected to close in the third quarter of 2021, and Alexion shareholders will own 15% of the combined company.

Russ Mould at AJ Bell commented: "You would think AstraZeneca could do without any distractions as it looks to address some of the scepticism which has built up around the Covid vaccine developed in partnership with Oxford University. Perhaps that's why the market has taken exception to its USD39 billion cash and shares bid for US biotech Alexon, with the company also taking on lots of debt to fund the deal."

Along with researchers from the University of Oxford, AstraZeneca has developed an effective Covid-19 vaccine which the UK government plans to use as the lynchpin of its inoculation drive, after first rolling out another vaccine by Pfizer and BioNTech.

But approval of the AstraZeneca-Oxford drug has been held up after queries over its initial trial results. On Tuesday, the UK partners became the first Covid-19 vaccine makers to publish final-stage clinical trial data in a scientific journal, clearing a key hurdle.

In other M&A activity in London, Codemasters shares rose 20% to 642.00 pence after Electronic Arts gatecrashed Take-Two Interactive Software's takeover approach.

Codemasters has agreed to a GBP945 million takeover bid from EA, withdrawing its previous recommendation of the GBP726 million offer made by Two Interactive Software.

In November, American video game company Take-Two Interactive reached an agreement to buy the UK's Codemasters. However, Redwood City, California-based EA's 604p per share cash offer tops New York-based Take-Two's bid of 120 pence per share in cash and 365p in Take-Two shares, valuing Codemasters at 485p per share.

Meanwhile, Polypipe shares rose 11% after saying it expects to beat full-year profit expectations.

For November, Polypipe said that its performance in November had exceeded expectations, with revenue for the month up 8.0% year-on-year due to a strong performance in Residential markets.

Looking ahead, Polypipe said its performance for December is also likely to beat expectations. As a result, for 2020 as a whole, the group has guided for underlying operating profit to be around GBP40 million.

This is above the consensus range of GBP35 million to GBP37 million, but still reflects a 49% fall from GBP78.1 million reported for 2019.

Gold was quoted at USD1,827.55 an ounce on Monday, lower than USD1,843.56 on Friday. Brent oil was trading at USD50.60 a barrel, higher than USD50.04 late Friday.

Against the yen, the dollar edged fell to JPY103.74 midday Monday in London versus JPY103.90 on Friday.

By Lucy Heming; lucyheming@alliancenews.com

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