(Alliance News) - London market participants were looking to squeeze out further price gains on Tuesday, hoping to capitalise on the bullish sentiment being driven by the positive test results for the Pfizer and BioNTech vaccine.
"There is still a long way to go with respect to the drug in question being given regulatory approval, but traders clearly have high hopes for the medication," CMC Markets analyst David Madden said.
The FTSE 100 index was up 30.37 points, or 0.5%, to 6,216.66 at midday in London. The FTSE 250 was up 70.92 points, or 0.4%, at 18,921.15. The AIM All-Share was up 0.85 of a point at 985.25.
The Cboe UK 100 was up 0.5% at 619.35. The Cboe 250 up 0.7% at 16,185.13. The Cboe Small Companies was up 1.4% at 10,360.27.
The CAC 40 in Paris was up 1.4%, but Frankfurt's DAX 30 was up just 0.1%.
"Huge gains for oil companies have resulted in another strong morning for the FTSE 100, as the vaccine trade continues to play out across global markets," IG Chief Market Analyst Chris Beauchamp commented.
He continued: "BP and Shell are providing around a third of the index's gains this morning, while Rolls-Royce enjoys yet another day in the sun with a 25% gain that has put 9 points on the FTSE 100, making a gain of around 75% for the shares since yesterday's open."
In London at midday, BP was 7.6% higher, while Royal Dutch Shell 'A' shares were up 4.2% and the 'B' were 4.5% higher. Rolls-Royce was up 20%.
Axi analyst Stephen Innes said: "If oil demand is ultimately judged by planes, trains, and automobiles moving from point A to B, the vaccine absolutely improves that view."
Brent oil was trading at USD42.90 a barrel Tuesday midday, up from USD42.46 on Monday evening.
"Also doing well today are REITs, banks and housebuilders, again benefiting from a rush into those names likely to see at least some benefit from an earlier than expected reopening of the UK and global economies," IG's Beauchamp added.
Lloyds Banking was up 5.2%, Barclays 5.1% and NatWest was 2.5% higher.
Real estate investment trusts British Land and Land Securities were up 7.2% and 7.9%, respectively.
Landsec was benefiting as well from reinstating its dividend.
Releasing half-year results Tuesday, the office and retail property developer said net asset value per share fell 9.6% to 1,068 pence at the end of September from 1,182p a year ago.
Revenue fell to GBP327 million from GBP369 million, and Landsec's pretax loss widened sharply to GBP835 million from GBP147 million.
Landsec posted a valuation deficit of GBP945 million for the versus, versus GBP368 million a year prior. Like-for-like net rental income, excluding provisions for bad and doubtful debts, was down 10%.
More positively, the commercial property developer reinstated its dividend alongside Tuesday's results. Landsec said it is resuming quarterly dividends - after suspending payouts in April in order to conserve cash - commencing with a 12p payment in January, representing an aggregated payment for the first two quarters of the year. LandSec paid out an interim dividend of 23.2p for the first half of 2019.
British Airways-parent International Consolidated Airlines was 9.7% higher, benefiting from the potential return to travel & leisure normalcy in early 2021 with the help of a vaccine against the new coronavirus.
At the other end of the FTSE 100, housebuilder Persimmon was down 5.1% despite announcing the payment of a further interim dividend following a "continuing strong performance" as sales rates remain ahead of the year prior.
The York, England-based housebuilder said trading through the summer weeks was "robust" as sales rates remained strong due to good availability of homes at an advanced stage of construction. From July 1 to November 9, average private weekly sales rates per site was 38% higher than a year prior, driven by the strength of the group's gross sales levels.
Persimmon said that it expects legal completions in the second half of 2020 to be in line with the second half of the year prior.
Persimmon declared a further interim dividend of 70 pence per share "reflecting the group's continuing strong performance". This, together with the previously paid interim dividend of 40p per share, replaces the postponed 110p per share final dividend declared for 2019, the company said.
Also in the red were companies that have benefited from coronavirus restrictions, with online grocer Ocado down 3.2%, and online food delivery platform Just Eat Takeaway down 3.3%. Ocado shed 13% on Monday and Just Eat lost 10%
Among London midcaps, also riding the wave of the Pfizer vaccine news were Cineworld and Carnival. The two stocks were up 41% and 10%, respectively, following Monday's 38% and 31% rise for the movie house chain and cruise operator. Anglo-German holiday firm Tui was up 12%.
Capita jumped 20%. Trading has been in line with expectations, the outsourcer said, and it expects to meet its debt covenants.
For the first quarter, revenue fell 11% to GBP803 million from GBP902 million, though operating profit tripled to GBP36 million from GBP12 million.
Capita said the "greater part" of its revenue has remained resilient, with the year-on-year fall driven by the impact of Covid-19, largely in its transactional businesses - such as travel and training - and contract losses announced in 2019.
The revenue reduction in the quarter has been mitigated through cost actions taken over the last twelve months, the firm added.
On the Education Software Solutions business, Capita said it continues to proceed with the unit's disposal and talks are ongoing.
US stock market futures were pointing to a mixed open. The Dow Jones Industrial Average was called up 0.8%, but the S&P 500 index was set to open 0.1% lower and the Nasdaq Composite down 1.6%.
Axi's Innes commented: "And while it's hard to ignore the market's momentum, I think some caution is warranted, especially on stocks, as the million-dollar question is whether the equity rotation out of tech and into other sectors actually sticks or if it is largely a factor of the market being caught underweight. And now the trillion-dollar question is what percent of vaccine hope is being priced into the current calculus."
The pound was quoted at USD1.3262 midday Tuesday, up from USD1.3131 at the London equities close Monday.
The unemployment rate in the UK rose to 4.8% for the quarter ending September 30, the National Statistics Office said Tuesday, in line with expectations. The UK unemployment rate was 0.9 percentage point higher than a year earlier and 0.7 percentage point up from the second quarter of 2020.
For July to September 2020, an estimated 1.6 million people were unemployed, up 318,000 on a year before and up 243,000 on the previous quarter. The annual increase was the largest since December 2009 to February 2010, and the quarterly increase was the largest since March to May 2009.
The UK employment rate was estimated at 75.3%, 0.8 percentage point lower than a year earlier and 0.6 percentage point lower than the previous quarter.
AJ Bell Financial Analyst Laith Khalaf said: "The darkest hour is just before dawn, and with a potential coronavirus vaccine now on the table, there is light on the horizon for the labour market.
"The vaccine breakthrough will give businesses greater confidence that an end to the pandemic is in sight and will encourage them to retain staff for a bit longer. For now though, the statistics are pretty grim, and are likely to get worse before the cavalry arrives."
"The third quarter was a record-breaking period, not just in the scale of the redundancies witnessed, but in the distortions happening within the labour market. That’s clearly a sign of a system under stress as people shift their behaviour to cope with the economic shock of the pandemic," Khalaf added.
The euro was priced a USD1.1807, soft from USD1.1815. Against the yen, the dollar was quoted at JPY105.18, down from JPY105.57.
Gold was quoted at USD1,879.40 an ounce, higher than USD1,853.81.
By Paul McGowan; paulmcgowan@alliancenews.com
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