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(Alliance News) - Stocks in London had a spring in their step midday Friday, with the mood boosted by the US health watchdog approving an antiviral to treat Covid-19 and Barclays lifting the banking sector with "well-received" third-quarter numbers.
The FTSE 100 was up 96.32 points, or 1.7%, at 5,881.97 midday Friday.
The mid-cap FTSE 250 index was up 193.02 points, or 1.1%, at 18,087.44. The AIM All-Share index was up 0.5% at 974.07.
The Cboe UK 100 index was up 1.6% at 584.49. The Cboe 250 gained 1.4% at 15,325.93, and the Cboe Small Companies was up 0.6% at 9,552.50.
"European equity markets are showing decent gains on the back of the news that the FDA has approved Gilead Science's remdesivir as a treatment for Covid-19. In the past few months there have been several big pharma companies scrambling to develop a drug to tackle the coronavirus, and now Gilead has the first official treatment," CMC Market UK Market Analyst David Madden explained.
"Obviously, a vaccine would be much more welcomed, but the treatment is a great leap forward, and there is a sense that a corner has been turned in the fight against the virus. Stocks in Europe have been drifting lower lately, and the remdesivir news acted as a green light to the bulls."
In Paris the CAC 40 was up 1.3%, while the DAX 30 in Frankfurt ended up 1.0%.
Stock prices in Europe shrugged off data showing the continent's economic bounce has been setback by a rise in Covid-19 infections, which has particularly hurt the hospitality sector.
Business activity fell back into decline across the eurozone in October, data from IHS Markit showed, with a plunging services economy more than offsetting manufacturing growth.
The flash eurozone services purchasing managers' index reading came in at 46.2 in October, compared to 48.0 in September, sinking further below the 50.0 no-change mark.
The manufacturing sector went the opposite direction, however. The manufacturing PMI jumped to a 26-month high of 54.4 in October, up from 53.7 in September. The flash eurozone manufacturing PMI output index rose to 57.8 from 57.1.
But due to the heavy services fall, the composite output index reading fell to 49.4 versus 50.4 in September.
Markit data also showed the UK's private sector suffered a "considerable" decline in growth in October.
Growth in manufacturing slipped, with output at a four-month low. Services activity, hurt by local lockdowns and renewed virus fears, also slipped to a four-month low.
The UK's flash composite output index - a weighted average of the manufacturing and services prints - fell to 52.9, its worst performance in four months. The final September figure was 56.5.
"The drop in the flash composite PMI in October to near the 50-mark that theoretically denotes no change in GDP adds to evidence that the economic recovery has ground to a halt," Pantheon Macroeconomics Chief UK Economist Samuel Tombs said.
"The second wave of Covid-19 is the obvious driver of the slowdown, though the recovery likely would have decelerated anyway, given that the burst of pent-up demand for services after the lockdown was lifted in July never was likely to be sustained."
The pound was quoted at USD1.3061, down from USD1.3095 at the London equities close on Thursday.
The euro stood at USD1.1843, up from USD1.1825.
In London, Barclays led the way in the FTSE 100, up 7.7%, with other lenders also in the green.
Barclays kicked off the UK banking reporting season by posting a "resilient" performance in the third quarter of 2020. Barclays said pretax profit for the three months ended September came in at GBP1.15 billion, up sharply from GBP246 million a year earlier. Third-quarter group income declined 6% to GBP5.20 billion from GBP5.54 billion, however.
Barclays booked a credit impairment charge of GBP600 million, up 32% annually but down 63% quarterly. It expects impairment charges to be "materially" lower in the second half of 2020 compared to the first and to be lower again in 2021 from 2020.
The lender did not declare a dividend, though Chief Executive Officer James Staley said he recognises "the importance of capital returns to shareholders and will provide an update on its policy and dividends at full year results".
"Barclays posted well-received third quarter numbers," CMC's Madden added. "This year banks have been making huge bad debt provisions as they are preparing themselves for a tidal wave of loan defaults, but this morning Barclays pointed out that a significant credit deterioration has not yet occurred."
Boosted by a promising read-across, Lloyds rose 5.3%, Standard Chartered climbed 4.6%, HSBC was up 4.5% and NatWest gained 3.7%. All four of them report third-quarter results next week.
Hospitality stocks were largely on the up. Whitbread jumped 1.9% on the FTSE 100. Elsewhere, pub owner JD Wetherspoon and gym operator Gym Group were up 4.3% and 6.0%, respectively. The trio continued making gains after UK Chancellor Rishi Sunak on Thursday unveiled a host of new measures for firms forced to close due to local lockdown restrictions.
Whitbread had risen 2.7% on Thursday, JD Wetherspoon gained 1.2% and Gym Group rose 1.7%.
In the red however, was Whitbread peer Intercontinental Hotels Group, down 1.1%.
InterContinental Hotels said its decline in revenue per available room, a crucial performance marker for hotel firms, eased quarter-on-quarter. The Holiday Inn owner's RevPAR was down 53% annually in the three months ended September, improved from a 75% annual decline in the previous quarter.
"Trading improved in the third quarter, although progress continues to vary by region," Chief Executive Officer Keith Barr said.
"Domestic mainstream travel remains the most resilient, and our industry-leading Holiday Inn brand family positions us well to meet that demand as it slowly returns."
Still to come on Friday has a US PMI reading at 1445 BST.
In the US, the Dow Jones Industrial Average is called up 0.3%, the S&P 500 is called up 0.2% and the Nasdaq Composite is called flat.
US President Donald Trump and challenger Joe Biden traded accusations of graft and clashed on the Covid-19 pandemic Thursday but without landing a knockout blow 12 days before the election in a final debate that many saw as Trump's last big chance to change the narrative.
Trump had signalled he'd try to damage Biden with his pursuit of murky accusations that his son Hunter was involved in graft in China and Ukraine while Biden was vice president under Barack Obama.
Perhaps the most startling aspect of the debate in Nashville, Tennessee, turned out to be the relative civility compared to the disastrous first debate last month when Trump spent much of the time shouting frontrunner Biden down.
Against the yen, the dollar was trading at JPY104.68 midday Friday, down from JPY104.83 at the London market close on Thursday.
Brent oil was quoted at USD42.22 a barrel, down from USD42.70 at the London equities close Thursday.
Gold fetched USD1,906.77 an ounce, up from USD1,898.00.
By Eric Cunha; ericcunha@alliancenews.com
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