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(Alliance News) - Stocks in London ended higher on Monday on optimism over parts of the UK economy slowly getting up and running amid the easing of lockdown restrictions.
The FTSE 100 index closed up 89.92 points, or 1.5%, at 6,166.42. The FTSE 250 ended up 234.57 points, or 1.4%, at 17,277.53, and the AIM All-Share closed up 8.52 points, or 1.0%, at 883.85.
The Cboe UK 100 ended up 1.8% at 10,433.70, the Cboe UK 250 closed up 1.5% at 14,793.13, and the Cboe UK Small Companies ended up 2.3% at 9,480.21.
In Paris the CAC 40 ended up 1.4%, but the DAX 30 in Frankfurt ended down 1.7%.
"The theme to today's winners on the FTSE 100 is 'rebound', with Associated British Foods leading the charge after its hopeful update this morning, boosting Next as well on hopes that retail may start its own bounce back soon. Throw in Carnival and IAG on hopes of a return to more international travel, plus Standard Chartered thanks to diminished US-China concerns, and we have the makings of a solid recovery for the index that looks poised to carry the index back towards last week's highs and on from there," said IG Group's Chris Beauchamp.
On the London Stock Exchange, Standard Chartered ended the best blue-chip performer, up 8.7% after Jefferies double upgraded the emerging markets-focused bank to Buy from Underperform.
Associated British Foods ended up 8.0% after Primark clothing chain owner expects to reopen all of its stores in England on June 15, following the recent announcement by the UK government on the opening of all other non-essential retail stores by that date.
Fellow fashion retailer Next closed up 5.3% in a positive read-across.
As at Monday, fashion retailer Primark is trading in 112 stores, which represents 34% of the brand total selling space. By June 15, Primark anticipates having 281 stores opened around the world, which represents 79% of total selling space.
Trading in the 112 stores has been regarded as both "reassuring and encouraging", with consumer demand strong for children's leisure and sleepwear, alongside summer products.
Pearson closed up 7.9% after Goldman Sachs raised the education publisher to Buy from Neutral.
In addition, travel stocks Carnival, International Consolidated Airlines and easyJet closed 7.3%, 5.9% and 3.8% amid optimism in the travel sector.
The pound was quoted at USD1.2470 at the London equities close, up sharply from USD1.2330 at the close Friday, amid optimistic signs in the UK manufacturing sector as some businesses began to tentatively restart production.
The UK manufacturing sector rebounded in May but Covid-19 continues to severely hamper the sector, data from IHS Markit showed.
The IHS Markit/CIPS purchasing managers' index rose to 40.7 in May from a record low of 32.6 in April. May's flash reading had been 40.6.
Though an improvement, the reading remained well below the no-change mark of 50, meaning the UK manufacturing sector continued to contract in May - though at a more moderate rate than in April.
"May's PMI reading was broadly in line with the preliminary estimate of 40.6 but the regional lockdowns and company shutdowns all contributed to the contraction as further disruptions caused operating conditions to deteriorate. As the lockdown measures are being eased (as from June) across the UK, we would expect to see another slight rebound in June's reading," said analysts at Shore Capital.
The UK took its first tentative steps out of lockdown as younger children went back to schools in England and parliament geared up to resume normal service, as police in the world's second-worst-hit warned was becoming difficult to enforce.
UK Prime Minister Boris Johnson has set out a timeline that allows two million younger children in England to return to school on Monday and older ones from June 15.
Outdoor markets also swung open their gates and car showrooms tried to lure back customers and recoup losses suffered since the UK effectively shut down for business on March 23.
In addition, the House of Commons returns from a break on Tuesday, and Johnson's minister for parliament, Jacob Rees-Mogg, wants MPs to start voting in person again, instead of remotely.
However, critics of the easing believe the so-called R rate of transmission - estimated nationally at between 0.7 and 0.9 - was still dangerously close to the 1.0 figure above which the virus' spread grows. They have warned the virus was still spreading too fast, and any return to work puts more vulnerable staff at risk.
The euro stood at USD1.1125 at the European equities close, up from USD1.1117 late Friday.
The manufacturing sector in the euro area remained in sharp contraction territory in May with Germany in particular still struggling, data from IHS Markit showed.
There was, however, a "noticeable easing" in May's downturn compared to the previous month. The IHS Markit Eurozone Manufacturing PMI in May rebounded from historical lows in April to 39.4 from 33.4.
Despite being generally looser across the region compared to April, government restrictions designed to limit the spread of the global coronavirus disease continued to severely hamper the sector, IHS Markit said.
Against the yen, the dollar was trading at JPY107.60, lower from JPY107.75 late Friday.
Stocks in New York were marginally higher at the London equities close - swinging between small gains and losses - as investors grappled with civil unrest across the US as the country began to reopen after weeks of coronavirus shutdowns.
The Dow Jones Industrial Average was up 0.2%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.2%.
Chicago, Illinois, Los Angeles, California and Houston, Texas were among the cities that imposed night-time curfews following a wave of demonstrations across the US in reaction to the shocking death last week of an unarmed black man, George Floyd, at the hands of police in Minneapolis, Minnesota.
The protests - some of which turned violent - come as Latinos and African Americans suffered disproportionate rates of death and hospitalisation from the coronavirus outbreak. Unemployment also has spiked among minority populations amid the business closures sparked by the Covid-19 pandemic.
In addition, China has halted some imports of US products in a move that could add to the friction between the two countries, and sour the prospects for existing and new trade agreements, Bloomberg reported on Monday.
Brent oil was quoted at USD37.60 a barrel at the London close, up sharply from USD35.72 at the close Friday, amid hopes OPEC and Russia were closer to a deal on extending oil cuts.
OPEC is set to hold its 179th meeting on June 9 and will meet with its allies a day later to discuss whether to extend record production cuts beyond June-end.
"Despite all the sabre-rattling surrounding Hong Kong and continuing concerns about Russia's commitment to OPEC+ cuts, oil market data has certainly been supportive, with Chinese demand recovering towards pre-virus levels and various US indicators (eg production and gasoline demand) generally heading in the right direction. Our inaugural SOPP report highlighted peak daily demand loss of 30 million barrels per day, although we sense that implied demand loss is currently sitting at nearer to 15mmbopd globally. So in simple terms, with the help of 10mmbopd of OPEC+ cuts and widespread shut-ins elsewhere, we see a market which is indeed very quickly rebalancing," said Shore Capital's Craig Howie.
Gold was quoted at USD1,734.85 an ounce at the London equities close, flat from USD1,732.75 late Friday.
The economic events calendar on Tuesday UK mortgage approvals at 0930 BST.
The UK corporate events calendar on Tuesday annual results from electrical parts maker Electrocomponents, private hospital group Mediclinic International and greeting card retailer Card Factory.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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