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(Alliance News) -Â A higher open in Europe on Tuesday followed on from an upbeat finish in the US and broadly positive trade in Asia overnight, buoyed by vaccine and stimulus hopes.
Leading London's FTSE 100 higher in opening trade on Tuesday were BT and Fresnillo.
The FTSE 100 index was up 27.77 points, or 0.5%, at 6,132.65 early Tuesday. The mid-cap FTSE 250 index was up 132.27 points, or 0.8%, at 17,290.21. The AIM All-Share index was up 0.4% at 892.80.
The Cboe UK 100 index was up 0.3% at 611.19. The Cboe 250 was up 0.6% at 14,676.68 and the Cboe Small Companies up 0.3% at 9,101.65.
In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 30 in Frankfurt was up 0.6% early Tuesday.
In the US on Monday, the Dow Jones Industrial Average closed up 114.88 points, or 0.4%, at 26,584.77. The S&P 500 closed up 23.78 points, or 0.7%, at 3,239.41 and the Nasdaq Composite ended up 173.09 points, or 1.7% at 10,536.27.
"US stocks kicked off the week on a positive note, even though the sentiment in European markets remained fragile. The GOP's USD1 trillion new fiscal stimulus plan helped boosting sentiment in the New York trading session. The Federal Reserve doves also tilt the balance to the positive side, as US policymakers are expected to maintain an ultra-dovish policy stance at this week's meeting amid the persistent rise in new Covid-19 cases over the past weeks," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The US Federal Reserve's two-day meeting begins on Tuesday, with the US central bank announcing its latest interest rate decision at 1900 BST on Wednesday.
The Fed will be monitoring a US Republican proposal for another coronavirus stimulus bill worth around one trillion dollars on Monday.
"The American people need more help," Republican Majority Leader Mitch McConnell said.
The plan would see another round of one-off payments of USD1,200 to most American adults, Senator Chuck Grassley said.
Grassley defended plans to replace USD600 weekly payments for the unemployed - which are due to expire at the end of the month - with payments of 70% of laid-off workers' last wages. Republicans argue that expanded jobless benefits encourage people to stay home and not go back to work, although it is unclear the extent to which this is true.
The Democrats have called for a package of around USD3 trillion, including continued weekly unemployment payments of USD600, which are due to expire in several days.
As well as stimulus boosting sentiment, the world's biggest Covid-19 vaccine study got under way with the first of 30,000 planned volunteers helping to test jabs created by the US government. It is one of several candidates in the final stretch of the global vaccine race.
There is still no guarantee that the experimental vaccine, developed by the National Institutes of Health and Moderna, will really protect. Volunteers will not know if they are getting the real shot or a dummy version. After two doses, scientists will closely track which group experiences more infections as they go about their daily routines, especially in areas where the virus still is spreading unchecked.
Next up in August, the final study of the Oxford shot begins, followed by plans to test a candidate from Johnson & Johnson in September and Novavax in October if all goes according to schedule.
In Asia on Tuesday, the Japanese Nikkei 225 index ended down 0.3%. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng index in Hong Kong is also up 0.7%.
The dollar nudged higher on Tuesday. Against the yen, the dollar was quoted at JPY105.50, up versus JPY105.15.
Sterling was quoted at USD1.2865 early Tuesday, lower than USD1.2888 at the London equities close on Monday. The euro traded at USD1.1727 early Tuesday, lower than USD1.1775 late Monday.
Brent oil was trading at USD43.62 a barrel early Tuesday, higher than USD42.47 late Monday.
At the top of the FTSE 100 was BT, up 2.9% after Barclays raised the telecommunications firm to Equal Weight from Underweight.
Fresnillo rose 2.6%. The gold miner reported sharp interim profit growth as commodity prices improved and costs were reduced.
Revenue was up 5.2% to USD1.05 billion in the first half of 2020, mainly due to higher gold and silver prices. The average realised gold price jumped 27% in the half-year to USD1,676.8 per ounce, while silver prices rose 10%.
Gold was quoted at USD1,936.76 an ounce early Tuesday, soft on USD1,937.08 on Monday. The precious metal closed in on the USD2,000 mark late Monday, trading just above USD1,980 an ounce, but since has given back some gains - though continues to trade around record high levels.
Fresnillo's pretax profit surged to USD127.9 million from USD54.1 million a year ago, with cost of sales falling to USD733.0 million from USD796.5 million even as revenue rose, and exploration expenses falling to USD50.7 million from USD84.0 million.
"The combination of higher commodity prices and lower costs has resulted in a significant rise in profitability during the first half. Our performance improvement initiatives we have set out in previous reports are having a positive impact. We remain committed to delivering a sustainable improvement in our operating performance and maintaining the momentum in the improvement plan into the second half," said Chief Executive Octavio Alvidrez.
Fresnillo said it will pay out an interim dividend of 2.3 US cents per share, down 12% on a year ago.
Centrica got a 2.5% boost after Jefferies upped the stock to Buy from Hold. Centrica on Friday said it agreed to sell its North American business Direct Energy for USD3.63 billion to Houston, Texas-based energy company NRG Energy.
At the bottom of the FTSE 100 was Reckitt Benckiser, down 1.4% despite reporting a strong half. The firm said its underlying performance has been ahead of expectations, the Dettol disinfectant maker getting a boost from Covid-19.
Revenue was up 11% to GBP6.91 billion in the first half of 2020, and pretax profit rose to GBP1.44 billion from GBP1.26 billion. Reckitt Benckiser reported Hygiene like-for-like sales growth of 16% and Health growth of 9.3%, resulting in overall like-for-like sales growth of 12%.
Its 2020 performance is now expected to be better than forecast back in April.
"Our underlying revenue performance (pre-Covid-19) has been ahead of our early expectations for the year and overall, including favourable tailwinds from Covid-19, we now expect high single digit growth for the year as a whole. Looking to the second half, net revenue growth is expected to reflect the benefit of Covid-19 tailwinds for Dettol and Lysol, improving trends in IFCN, offset by likely ongoing uncertainties of pantry-unloading, particularly for our OTC portfolio when combined with a likely weaker cough/cold and flu season and ongoing headwinds caused by social distancing," said Reckitt.
2020 margins are expected to be in line with current consensus expectations, it added.
Reckitt declared an interim dividend of 73p, flat on a year ago.
By Lucy Heming;Â lucyheming@alliancenews.com
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