(Alliance News) - The FTSE 100 rallied on Tuesday as traders looked to the easing of lockdowns across Europe and the US, while a boost for oil helped blue-chip heavyweights BP and Royal Dutch Shell post share price gains.
The FTSE 100 index closed up 95.64 points, or 1.7%, at 5,849.42. The FTSE 250 ended up 141.46 points, or 0.9%, at 16,093.14, and the AIM All-Share closed up 2.69 points, or 0.3%, at 802.42.
The Cboe UK 100 ended up 1.7% at 9,904.24, the Cboe UK 250 closed up 0.7% at 13,796.16, and the Cboe Small Companies ended up 0.2% at 8,881.80.
In European equities on Tuesday, the CAC 40 in Paris ended up 2.4%, while the DAX 30 in Frankfurt ended up 2.5%.
"Firmly focused on the various lockdown easing measures being implemented – or set to be implemented – around the globe, the markets kept up their rebound throughout Tuesday," said Connor Campbell at Spreadex.
Across Europe, millions of people revelled at being able to return to the outdoors, mixed with a dose of trepidation about life ahead and the economic damage wreaked by lockdowns.
Workers banged away at construction sites in Rome, police handed out masks in Madrid and older children returned to school in Vienna. As France prepares to lift its shutdown next week, the Paris mayor has announced that some busy roads will be reserved for bicycles to try to limit the crowds on public transport.
Elsewhere in Europe, Germany's biggest state Bavaria said it would allow restaurants to open from mid-May, with pressure growing on Chancellor Angela Merkel to ease stay-at-home measures.
Hong Kong announced plans to ease major social distancing measures, including by reopening schools, cinemas, bars and beauty parlours after the Chinese territory largely halted local transmission of the virus.
The UK death toll from the virus now stands at 32,313, the second highest in the world. Figures from the Office for National Statistics showed Britain has now overtaken Italy, which has reported 29,029 fatalities, and now only stands behind the US with 68,700 deaths, the largest single-country toll.
Data in the morning confirmed the UK service sector slumped to unseen levels in April due to Covid-19 lockdowns.
IHS Markit/Chartered Institute of Procurement & Supply services purchasing managers' index fell to 13.4 in April from 34.5 in March. Prior to the onset of Covid-19, the survey's record low had been at 40.1 in November 2008.
The pound was quoted at USD1.2453 at the London equities close Tuesday, higher compared to USD1.2425 at the close on Monday.
Over in the US, figures similarly showed the service sector suffering in April.
The Institute for Supply Management's non-manufacturing index fell to 41.8 in April from 52.5 in March, the lowest reading since March 2009 when the index hit 40.1.
Stocks in New York were climbing at the London equities close, with the Dow Jones, S&P 500 index and Nasdaq Composite all up 1.5%.
Meanwhile, the euro dipped on Tuesday after a ruling from Germany's Constitutional Court largely upheld several complaints against the European Central Bank's purchase of government bonds.
This was the result of years of debate over the role of the eurozone central bank, with judges announcing their ruling in the city of Karlsruhe on Tuesday.
Top German judges raised concerns back in 2017 that one part of the bond-buying programme, the Public Sector Purchase Programme, could engage in economic policy and government financing, both of which the ECB is prohibited from doing.
Germany's Bundesbank central bank will be barred from participating in QE in three months' time unless the ECB "demonstrates in a comprehensible and substantiated manner that the monetary policy objectives pursued by the ECB are not disproportionate," the Constitutional Court said in a landmark ruling.
The ruling does not cover current ECB aid issued in response to the coronavirus crisis.
The euro stood at USD1.0842 at the European equities close Tuesday, against USD1.0913 at the same time on Monday.
Against the yen, the dollar was trading at JPY106.58 compared to JPY106.87 late Monday.
Fellow safe haven gold was quoted at USD1,698.55 an ounce at the London equities close Tuesday against USD1,705.55 at the close on Monday.
Brent oil was quoted at USD30.22 a barrel at the London equities close Tuesday from USD26.12 late Monday.
The surge in oil prices lead to an upbeat session for BP and Royal Dutch Shell. BP shares advanced 6.1% and Shell 'A' and 'B' shares ended 5.6% higher and 5.1% higher respectively.
"The oil market is pushing higher as demand fears have faded a little as countries appear to be edging closer to loosening their lockdown restrictions. On a similar note, seeing as the perception is that demand will rise, that has reduced some of the fears surrounding storage issues – which was a big reason for oil's recent declines," commented David Madden at CMC Markets.
At the bottom of the FTSE 100 was British Airways owner International Consolidated Airlines, closing down 3.9% in a negative read-across from rival Virgin Atlantic.
Virgin Atlantic said it will axe over 3,000 jobs as it warned that a recovery to pre-crisis levels is expected to take up to three years.
Alongside the job cuts, Virgin will move its operations from London's Gatwick airport to Heathrow as part of measures to "reshape and resize" the business amid the severe impact of the Covid-19 pandemic on the travel and aviation industry.
The airline, which is majority owned by British businessman Richard Branson's Virgin Group, also plans to retire all of its seven Boeing 747-400 aircraft, with four Airbus A330-200 aircraft retiring in early 2022 as planned.
"It is crucial that we return to profitability in 2021. This will mean taking steps to reshape and resize Virgin Atlantic in line with demand, while always keeping our people and customers at the heart of all we do," said Virgin Atlantic Chief Executive Shai Weiss said.
In the FTSE 250, LondonMetric shares rose 4.1% to 190.10 pence after upping the size of a fundraise to GBP120 million following "exceptional" demand.
The property company earlier Tuesday had planned to raise GBP100 million to fund acquisitions, and added that its investment portfolio continued to demonstrate good resilience despite the uncertainty caused by the Covid-19 pandemic.
However, it decided to increase the size to the raise and placed 66.7 million shares at a price of 180p, representing a 1.5% discount to Monday's closing price.
Insurer Hiscox rose 3.9% after Peel Hunt upgraded the stock to Add from Reduce.
Just after the market close, Hiscox said it is planning a share placing for up to 19.99% of its issued share capital.
"We are announcing an equity placing today in order to respond to growth opportunities and rate improvement in the US wholesale and reinsurance markets. We have managed our investments prudently and our capital position is robust, with an estimated group regulatory solvency ratio at the end of March of 195%," said Chief Executive Bronek Masojada.
The UK corporate calendar on Wednesday has first quarter results from medical technology company Smith & Nephew, insurer Direct Line and broadcaster ITV. Online grocer Ocado puts out a trading statement.
In the economic calendar for Wednesday, there is an Irish services PMI at 0101 BST followed by the same from Germany and the eurozone at 0855 BST and 0900 BST respectively. There is a UK construction PMI at 0930 BST and eurozone retail sales at 1000 BST.
US ADP employment change is at 1315 BST, the data a precursor to Friday's monthly jobs report.
By Lucy Heming;Â lucyheming@alliancenews.com
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