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(Alliance News) - Stocks in London ended mostly higher on Thursday as investors reacted positively to the latest emergency support measures announced by Chancellor of the Exchequer Rishi Sunak.
The UK government will offer billions of pounds worth of extra help for firms and workers hit by coronavirus restrictions, the chancellor said Thursday in the Commons. The package includes making the Job Support Scheme, which replaces the current furlough system, more generous.
There will also be grants of GBP2,100 available for firms in Tier 2 areas of England, primarily aimed at helping hospitality and leisure venues which have seen takings plummet due to a restriction on household mixing.
In a move which could be worth more than GBP1 billion, grants will also be available retrospectively for areas which have already been subject to restrictions, and come on top of higher levels of additional business support for areas moving into Tier 3. Around 150,000 business in England could be eligible, the treasury said.
The package, which is estimated to cost around GBP13 billion over six months, is aimed at heading off criticism from areas of northern England which have been under restrictions for months.
The FTSE 100 index closed up 9.15 points, or 0.2%, at 5,785.65. The FTSE 250 ended up 106.60 points, or 0.6%, at 17,894.42. The AIM All-Share closed down 3.44 points, or 0.4%, at 969.16.
The Cboe UK 100 ended up 0.3% at 575.18, the Cboe 250 closed up 0.5% at 15,112.3, and the Cboe Small Companies ended up 1.0% at 9,495.95.
In Paris the CAC 40 and DAX 30 in Frankfurt both ended down 0.1%.
IG Group's Josh Mahony said: "Early declines have been recovered on the FTSE 100, with stocks stabilising somewhat as hopes of stimulus on both sides of the Atlantic helped improve sentiment. The outperformance of the FTSE 250 highlights the positive reaction to Rishi Sunak's latest bumper financial package, with the economic fallout of this latest surge in localised lockdowns likely to be partially mitigated thanks to steps aimed at avoiding job losses, unemployment and bankruptcy.
"With the furlough scheme set to end, the governments plan to provide grants and wage support in a bid to help lessen the burden of this temporary crisis has brought a sigh of relief for markets."
On the London Stock Exchange, Hargreaves Lansdown ended the best blue chip performer, up 4.6% after Peel Hunt raised the fund supermarket to Buy from Add.
In addition, Hargreaves was benefiting from a positive read-across from smaller peer AJ Bell which said Thursday it grew assets and customer numbers in its recently completed financial year and is confident of future growth.
The online investment platform ended the year to September 30 with assets under administration of GBP56.5 billion, up 8% from GBP52.3 billion at the same point a year before.
FTSE 250-listed AJ Bell closed up 4.2%.
Blue-chip airline operator International Consolidated Airlines Group managed to close up 4.4%. The British Airways parent said Covid restrictions and the resultant crash in air travel hammered third-quarter performance, and the company now expects to fly just 30% of 2019 capacity in the final quarter of 2020.
The FTSE 100-listed company - which also owns Aer Lingus, Iberia, Level and Vueling - said "recent overall bookings have not developed as previously expected" as Europe as imposed additional curbs in response to the second wave of the virus. Local lockdowns, extensions of quarantine requirements and a lack of pre-departure testing or air corridors have not been adopted as "quickly as anticipated" either.
Unilever closed up 0.4% after the Anglo-Dutch consumer goods firm posted underlying sales growth for the third quarter of 2020, but warned that its planned unification under a single UK entity is still threatened by a Dutch bill that would impose an exit tax.
For its third quarter ended September 30, Unilever posted underlying sales growth of 4.4%, though total revenue slipped 2.4% annually to EUR12.9 billion. For the first nine months of 2019, revenue was 1.8% lower at EUR38.6 billion.
In June, Unilever announced its plan to combine its dual-headed structure into one single London-based entity but said it would retain its stock listings in London and Amsterdam. Dutch investors approved the unification plan in September and in September, the UK shareholders did the same.
However, on Thursday, referring to an exit tax bill tabled in the Dutch Parliament earlier this month, the company noted changes had been made compared to the initial proposal in July, but risks remained for its unification plans.
Unilever argued the Dutch bill in its current form will "infringe" several tax treaties.
Mexican gold miner Fresnillo ended as the worst performer, down 3.0% tracking spot gold prices lower.
Gold was quoted at USD1,898.00 an ounce at the London equities close, sharply lower against USD1,922.40 late Wednesday.
BAE Systems closed down 2.9% after the stock went ex-dividend - meaning new buyers no longer qualify for the latest payout.
The pound was quoted at USD1.3095 at the London equities close, down from USD1.3145 at the close Wednesday.
Sterling gave up some of the strong gains obtained Wednesday against the greenback on hopes of a post-Brexit tade deal between the UK and the EU.
EU negotiators headed to London on Thursday to resume talks after Britain called off a boycott, with both sides vowing to work round the clock to seal a deal in the short time left.
Britain meanwhile on Thursday said it had agreed a provisional trade deal with Norway, Switzerland and two other non-EU partners to ensure continuity after its Brexit divorce from the EU.
The euro stood at USD1.1825 at the European equities close, down from USD1.1868 late Wednesday, amid a risk-off mood in European equities as coronavirus cases on the continent remain elevated.
Businesses closed across Ireland on Thursday for a second national coronavirus lockdown, as record infection surges in Germany and Italy helped to spread gloom across the continent. Germany and Italy are both facing record surges, registering their highest one-day tallies since the pandemic began.
Most European governments have been reluctant to reimpose national stay-at-home orders, after previous restrictions led to deep recessions.
"The 'risk-off' mood in European equities continues for a fourth day, capping yesterday's rally in EURUSD. Much of the newsflow out of Europe remains familiar and worrying. Germany and Italy recorded another record day of new Covid-19 cases," said AxiCorp's Stephen Innes.
Against the yen, the dollar was trading at JPY104.83, up from JPY104.53 late Wednesday.
Stocks in New York were modestly lower at the London equities close following sharp losses the previous session, with investors spooked by a sharp rise in coronavirus cases and continued uncertainty over a pre-election stimulus package in Washington.
The DJIA was down 0.1%, the S&P 500 index down 0.4% and the Nasdaq Composite down 0.7%.
The deadlock in Washington over the stimulus package comes as coronavirus cases surge across the US, with many Americans already struggling and observers fearful the economy could be hit badly.
The White House has said it will agree to a USD1.9-trillion package but that is USD300 billion short of what Democrats have put forward and much more than many Republicans are willing to accept.
Elsewhere, the final televised presidential election debate between incumbent Donald Trump and Democratic challenger Joe Biden takes place in Nashville, Tennessee at 2100 EDT.
Trump and Biden will have their microphones turned off at Thursday's presidential debate to enforce two minutes of uninterrupted speaking time for each candidate per topic, after the first debate between the rivals descended into chaos.
Brent oil was quoted at USD42.70 a barrel at the London equities close, up sharply from USD41.95 at the close Wednesday.
"Brent Crude has rebounded after they fell to nearly one week lows yesterday. For much of October, the oil market has been drifting lower as concerns about demand - in light of rising coronavirus cases and tighter restrictions - has weighed on sentiment. The fact that US politicians have yet to reach a stimulus deal hasn't helped either," explained CMC Markets analyst David Madden.
The economic events calendar on Friday has PMI readings from France, Germany, the eurozone, UK and US at 0815 BST, 0830 BST, 0900 BST, 0930 BST and 1445 BST respectively. There are also UK retail sales figures at 0700 BST.
The UK corporate calendar on Friday has third quarter results from lender Barclays, hotel operator InterContinental Hotels Group and from London Stock Exchange Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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