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(Alliance News) - Stocks in London ended the week higher on Friday as investors took heart from promising data by Gilead Sciences that showed remdesivir reduced mortality risk for Covid-19 patients by 62%.
The FTSE 100 index closed up 45.79 points, or 0.8%, at 6,095.41, and ended the week down 2.3%.
The FTSE 250 closed up 194.84 points or 1.2% at 17,179.97, ending the week down 1.1%. The AIM All-Share closed up 2.09 points or 0.2% at 882.33, ending the week down 1.1%.
The Cboe UK 100 ended up 0.8% at 607.24, the Cboe UK 250 closed up 0.9% at 14,542.44 and the Cboe Small Companies ended down 0.5% at 9,167.42.
In Paris the CAC 40 ended up 1.0%, while the DAX 30 in Frankfurt ended up 1.2%.
"Sentiment has been buoyed by hopes for a Covid-19 treatment. A study has found that Remdesivir, an anti-viral drug, can reduce the fatality rate in patients by 62%. It was already known that the drug assisted people who are suffering from the coronavirus, but this latest batch of positive news gave stocks a nudge higher," said CMC Markets analyst David Madden.
"This week the headlines were dominated by stories of record cases in various US states, and policymakers re-imposing lockdown restrictions, so the Remdesivir story has been a nice change of pace," Madden added.
Stocks in New York were mostly higher at the London equities close as investors assess the potential economic fallout from rising coronavirus cases in the US, the world's biggest economy.
The DJIA was up 0.6%, the S&P 500 index up 0.2% and the Nasdaq Composite down 0.2%.
On Thursday the US reported 63,200 new coronavirus cases, another record spike, according to data from Johns Hopkins University. Florida, Texas, and California also reported record deaths due to the virus.
Investors have largely shrugged off the jump in coronavirus cases, partly because the US death rate has been much lower than earlier this spring. But a number of states have reported record deaths in recent days, raising fears that the trend is reversing.
However, sentiment was lifted after a positive announcement from drugmaker Gilead Sciences which announced additional data on Remdesivir as a possible treatment for Covid-19 that found the drug was associated with a 62% reduction in risk of mortality versus standard of care.
This finding comes from a comparative analysis of clinical recover and mortality outcomes from Gilead's phase 3 Simple trial, compared to a real-world cohort of patients with severe Covid-19 who received standard of care.
Gilead was up 2.5% in New York.
On the London Stock Exchange, Barclays ended the best blue-chip performer, up 5.2% after Investec raised the lender to Buy from Hold.
Elsewhere, Gym Group closed up 0.3% on the positive news that the gym operator can reopen its doors after being closed since March due to coronavirus lockdown measures.
New UK government guidance means outdoor pools can reopen from July 11 and that indoor gyms, swimming pools and sports facilities can be back in business from July 25.
The company said 160 gyms in England will reopen on July 25, though it noted some units could be subject to lockdown, like those imposed on Leicester. Gym Group noted that it had 692,000 members as of Thursday, a 20% slump from 870,000 on March 18. Promisingly, internal research has found 92% of members "are keen to return" to sites.
Gym Group will impose safety measures, like limiting the amount of gym-goers allowed at a time. It will also implement temperature checks on its staff every day.
The pound was quoted at USD1.2661 at the London equities close, up from USD1.2615 at the close Thursday. Sterling has gained 1.5% over the past week.
Sterling recovered from intraday low of USD1.2565 versus the greenback amid persisting no-deal Brexit fears after the EU said Thursday it is planning emergency measures to preserve access to some of Britain's financial services after the Brexit transition period. The bloc also warned of "inevitable disruptions" even if a deal is agreed with London.
"The pound has been an outperformer throughout the week as the end of June deadline for extending the Brexit transition period was passed without a major decline," said IG Group.
The euro stood at USD1.1317 at the European equities close, up from USD1.1297 late Thursday. Against the yen, the dollar was trading at JPY106.75, down from JPY107.47 late Thursday.
"GBP/USD and EUR/USD are higher on the session on account of the slide in the US dollar. The greenback enjoyed a rally yesterday afternoon as dealers adopted a risk-off strategy. Today, we are seeing a partial reversal of that move. There were no important economic announcements from the UK today. Next week, UK-EU negotiations will continue so that is likely to be in focus," said CMC's Madden.
Brent oil was quoted at USD42.72 a barrel at the London close, up from USD42.33 at the close Thursday.
"Crude prices are rising on upbeat Covid-19 vaccine and treatment news, a softer dollar, and after the EIA improved their oil demand forecast for the rest of the year," said OANDA market analyst Edward Moya.
Oil output hit a nine-year low last month as producers reacted to the plunge in demand triggered by the coronavirus crisis, the International Energy Agency said, but output is now set to recover.
While the Paris-based agency warned that the resurgence of the coronavirus in parts of the world injected added uncertainty into forecasts, it sees the market turning a corner.
"During June, global oil output tumbled to a nine-year low" as the OPEC cartel and its allies cut production and producers in the US and elsewhere reacted to continued relatively low prices and scaled back operations. "From July, however, oil supply should begin to trend higher as producers react to signs of recovering demand as lockdowns ease," said the IEA in its regular monthly report on the oil markets.
Moya added: "Crude prices could slide if OPEC+ signals the oil production cuts will likely taper from 9.7 million barrels per day to 7.7 million bpd at the end of the month. The demand outlook risks warrant a discussion for OPEC+ to consider extending production cuts into August."
Gold was quoted at USD1,801.62 an ounce at the London equities close, flat against USD1,802.20 late Thursday.
The UK corporate calendar on Monday has half-year production results from Egyptian gold miner Centamin.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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