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(Alliance News) - London stocks were surging at midday on Tuesday as they raced to catch up with events after Monday's holiday in the UK.
Retailers were buoyed by news that shops in England will be able to open again in mid-June, and travel stocks were boosted by a German bailout for Lufthansa and an easing of travel restrictions in Europe in time for the summer holidays.
The FTSE 100 index was up 77.45 points, or 1.3%, at 6,070.73. The FTSE 250 was up 495.39 points, or 3.0%, at 16,894.25, and the AIM All-Share was up 1.5% at 856.18.
The Cboe UK 100 was up 1.2% at 10,260.73, the Cboe UK 250 up 3.4% at 14,426.21, and the Cboe UK Small Companies up 0.9% at 8,989.79.
In European equities on Tuesday, the CAC 40 in Paris was up 1.2%, while the DAX 30 in Frankfurt was up 0.6%. While markets in the UK were closed on Monday, the CAC 40 and DAX 30 had gained 2.2% and 2.9% respectively.
"The line of least resistance continues to be for markets to drive higher this morning as UK and US investors return from their long weekends. Talk of vaccine trials and further easing of economic lockdowns is fuelling confidence that the worst is behind us, and that the way forward is for a continued improvement in economic activity," said Michael Hewson at CMC Markets.
In the UK, fashion stores, betting shops and charity stores all will be allowed to welcome back customers from June 15, the government has said.
Gift shops in museums, retail spaces in theatres, libraries, heritage sites and tourism sites also will be allowed to open – paving the way for visitors to return to tourist hotspots.
Minister for the Cabinet Office Michael Gove said shoppers would need to "exercise restraint" by not trying on clothing and testing goods ahead of purchase.
The lockdown easing details came as data showed the number of deaths involving coronavirus in the UK reached its lowest weekly level for six weeks in May.
There were 4,210 deaths involving Covid-19 registered in the week ending May 15, according to the most recent data from the Office for National Statistics. It is the lowest weekly total since the week ending April 3, when 3,801 Covid-19-related deaths were registered.
UK government ministers were keen to stress the date of shop re-openings could change if reductions in coronavirus infections fail to meet expectations.
The announcement of the new rules was overshadowed by Gove being forced to defend government adviser Dominic Cummings over his decision to travel nearly 300 miles from his primary residence to seek childcare.
The pound was quoted at USD1.2308 Tuesday midday, up sharply from USD1.2190 at the London equities close Friday.
Retailers were among the risers on the London Stock Exchange at midday, with Primark-owner Associated British Foods up 7.7%, fellow clothing retailer Next up 6.4%, and books and magazines seller WH Smith up 14%.
Leading the way on Tuesday, however, were travel stocks.
British Airways owner International Consolidated Airlines was up 20% and easyJet up 16%. Rolls-Royce Holdings - which makes jet engines - was up 13% and holiday operator TUI up 36%.
"Virus cases falling after over a month of lifting lockdown restrictions means travel restrictions are the next to go. Austria, Germany and Switzerland had already relaxed travel between their borders. Germany is now considering removing a travel warning to tourists for 31 European destinations...The timing couldn't be better for travel firms hoping to grab the end of the Summer bookings season," said Jasper Lawler at London Capital Group.
Spain said on Saturday it will let in foreign tourists from July 1. Italy is due to reopen its borders to foreign tourists from June 3.
Also boosting airlines was news of a bailout for struggling German flag carrier Lufthansa.
The German government and Lufthansa agreed on the much-anticipated bailout deal to help the airline cope with losses from the coronavirus pandemic, both sides announced on Monday.
The deal, which provides for aid and equity measures worth EUR9 billion, is yet to be approved by Lufthansa's board and the European Commission's competition watchdog. As part of the bailout, Berlin will receive a 20% stake in the airline group.
Lufthansa shares were up 6.6% on Tuesday afternoon in Frankfurt, having gained 7.3% on Monday.
The euro was quoted at USD1.0953, up from USD1.0886 late Friday in London. Against the yen, the dollar was at JPY107.68, higher than JPY107.51.
Oil was quoted at USD35.90 a barrel Tuesday, up from USD34.72 late Friday. Gold was priced at USD1,725.46 an ounce, soft on USD1,733.00.
Stocks in New York are set for a higher open on Tuesday after Monday's Memorial Day holiday in the US. The Dow Jones is seen up 2.1%, the S&P 500 up 1.9% and the Nasdaq up 1.8%.
Back in London, Aston Martin shares were up 32% after confirming Chief Executive Officer Andy Palmer has stepped down with immediate effect, with the luxury carmaker appointing Mercedes executive Tobias Moers as his replacement.
Palmer's position as chief executive had been the subject of speculation since billionaire Lawrence Stroll led a consortium that bought a 25% stake in Aston Martin last month, and then sold part of that to another consortium led by Mercedes-AMG Formula 1 team principal Toto Wolff.
Tuesday's announcement confirmed a report in the Financial Times newspaper on Sunday.
Moers will be based at Aston Martin's headquarters in Gaydon, Warwickshire and will join the company on August 1.
He is currently CEO of the AMG sports car arm of Mercedes Benz, itself part of 4% Aston Martin shareholder Daimler. Since assuming his current role in 2013, Moers has led a major expansion of Mercedes-AMG, doubling its model range and increasing sales.
Stagecoach was up 14% after the UK Department for Transport made GBP283 million available for the phased increased of bus, tram and light rail services in England.
The UK government is looking to step up transport services in England, after normal bus, tram and light rail networks across the UK were mostly paused in March as part of the effort to stop the spread of Covid-19.
As part of this, the Department for Transport has made GBP254 million available for buses and GBP29 million for trams and light rail to help increase the frequency and capacity of services.
Softcat shares slipped 4.3% after it reported trading in the quarter ended April 30 was "satisfactory".
In a brief trading update, Softcat said it saw growth in revenue, gross profit and operating profit in its third quarter. Cash receipts from customers have remained broadly in line with normal trends, Softcat added.
The firm continued: "There remains a high degree of uncertainty in the coming months and Softcat is not immune to the challenges faced by the wider economy. However, we have moved seamlessly to a remote working model, and the board is encouraged by the resilience of the business thus far."
By Lucy Heming; lucyheming@alliancenews.com
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