(Alliance News) - Stocks in London ended higher on Wednesday rebounding after closing lower on Tuesday, shrugging off AstraZeneca's setback in an attempt to find a coronavirus vaccine.
The FTSE 100 index closed up 82.54 points, or 1.4%, at 6,012.84. The FTSE 250 ended up 15.18 points, or 0.1%, at 17,640.36, and the AIM All-Share closed down 0.1% at 951.90.
The Cboe UK 100 ended up 1.7% at 600.15, the Cboe UK 250 closed down 0.2% at 15,050.26, and the Cboe Small Companies ended flat at 9,411.42.
In European equities, the CAC 40 in Paris ended up 1.4% and the DAX 30 in Frankfurt up 2.1%.
"Stocks in Europe are driving higher as bargain hunters have swooped in to take advantage of the relatively low prices in the wake of yesterday's sell-off. There hasn't been any major positive news in the past 24 hours, but the turnaround in sentiment in the US tech sector has influenced the mood in Europe. Recently, any big sell-offs in Europe have been driven by the moves in the US tech sector, so now that some calm has been restored over there, things are on the up here," CMC Markets analyst David Madden said.
The pound was quoted at USD1.2999 at the London equities close, down from USD1.3030 at the close Tuesday, having fallen to a six-week low earlier in the session against the greenback as investors become increasingly fearful of a no-deal Brexit.
Sterling fell to an intraday low of USD1.2885 versus the greenback in afternoon trade - its lowest since late July.
UK Prime Minister Boris Johnson was accused Wednesday of presiding over a "rogue state" as his government introduced legislation that intentionally breaches its EU withdrawal treaty in the messy countdown to a full Brexit divorce.
Brussels demanded emergency talks to address the bill, which governs post-Brexit trade in Britain and Northern Ireland, and Johnson was set to brief Ireland's leader to explain the extraordinary turn of events.
In a bad-tempered exchange in parliament with Scottish nationalist MP Ian Blackford, Johnson insisted the bill was about "protecting jobs, protecting growth, ensuring the fluidity and safety of our UK internal market".
"My job is to uphold the integrity of the UK but also to protect the Northern Ireland peace process and the Good Friday Agreement," he added, calling the new bill a "legal safety net" if the EU makes an "irrational interpretation" of post-Brexit arrangements.
The government maintains its new UK Internal Market Bill is needed to smooth trade between England, Scotland, Wales and Northern Ireland, helping power a recovery from the coronavirus pandemic once a post-Brexit transition ends this year.
But under its EU Withdrawal Treaty, Britain is meant to liaise with Brussels on any arrangements for Northern Ireland, which saw three decades of bloodshed until the 1998 Good Friday Agreement, and will become the UK's only land border with the EU.
The government has struggled to explain why it has only now discovered problems with the EU treaty's provisions for Northern Ireland, nine months after Johnson signed the document and said it set the UK on the path to a sovereign new future.
Analysts at OFX said: "Boris Johnson's ongoing demands and threats to walk away from discussion if the EU do not budge continues to put significant pressure on the pound. Internal frustration in the UK government is growing, as a senior lawyer quit over disagreements around how the withdrawal agreement should be negotiated.
"According to senior figures in Germany, the latest signals from London do not raise hopes for a Brexit deal. As we all know, a disorderly Brexit would be disastrous for the economy in the UK and only add to the already dire situation post the pandemic."
In the FTSE 100, the weak pound was helping internationally-exposed firms end higher, with Ashtead Group, Unilever and Reckitt Benckiser closing up 5.3%, 3.8% and 2.9% respectively.
AstraZeneca closed up 0.5% despite suffering a setback in its attempt to rollout a coronavirus vaccine. The drugmaker said it had "paused" clinical trials of its experimental Covid-19 vaccine, being developed together with Oxford University, after a volunteer developed an unexplained illness.
In the FTSE 250, Avon Rubber closed up 6.3% after the protection equipment manufacturer said it has agreed to acquire Cleveland, Ohio-based helmets supplier Team Wendy for USD130 million.
At the other end of the midcaps, pub chain JD Wetherspoon ended the worst performer, down 9.5% after the UK government tightened coronavirus restrictions in England.
The legal limit on social gatherings will be reduced from 30 people to six. It will apply to gatherings indoors and outdoors - including private homes, as well as parks, pubs and restaurants. Some 2,420 lab-confirmed cases of coronavirus were recorded in Britain as of 0900 BST on Tuesday, following the 2,988 reported in the UK on Sunday, which was the largest daily figure since May.
The euro stood at USD1.1812 at the European equities close, up from USD1.1796 late Tuesday, ahead of the European Central Bank's interest rate decision on Thursday. The central bank is widely expected to keep rates unchanged.
The Frankfurt-based bank will announce its latest policy decision at 1245 BST on Thursday. This will be followed by a press conference with President Christine Lagarde at 1330 BST.
"The ECB meeting on Thursday is set to be relatively uneventful for markets as the ECB still needs further data to assess the economic and inflation impact from Covid-19. According to the Governing Council members Schnabel, Lane and Kazimir, the euro area recovery pace has roughly been in line with the assumptions of the ECB's baseline scenario, which foresees growth of -8.7% this year and 5.2% next year. Therefore, we do not expect the ECB to act, but rather signal a readiness to act should it be needed, noting also that incoming data will be providing a better guidance for potential policy actions," said analysts at Danske Bank.
Against the yen, the dollar was trading at JPY106.23, up from JPY105.94 late Tuesday.
Stocks in New York were sharply higher at the London equities close, rebounding from a three-day rout, which saw tech-heavy Nasdaq Composite index fall into correction territory on Tuesday.
The DJIA was up 1.5%, the S&P 500 index up 1.8% and the Nasdaq Composite up 2.4%.
Tech giants including Apple, Microsoft and Tesla had led Tuesday losses to bring the Nasdaq's succession of record highs to a juddering halt. A market correction is typically defined as a fall of 10% from a recent high, which the Nasdaq recorded last week.
Brent oil was quoted at USD40.32 a barrel at the London market close, up from USD39.54 at the same time on Tuesday.
Gold was quoted at USD1,945.72 an ounce at the London equities close, higher against USD1,926.32 late Tuesday.
The economic events calendar on Thursday has US producer prices and the latest jobless claims figures at 1330 BST.
The UK corporate calendar on Thursday has interim results from supermarket chain WM Morrison Supermarkets, gambling firm Rank Group and oil and gas company Energean. There are also annual results from home furnishings retailer Dunelm Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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