(Alliance News) - Share prices in Europe were higher midday Monday, amid hopes that US President Joe Biden's huge stimulus proposal will be passed by lawmakers.
In London, the FTSE 100 got a boost from miners and oil majors on rising commodity prices. Travel stocks hit the mid-cap FTSE 250 index as doubts were cast over the AstraZeneca vaccine, raising fears that the latest round of Covid-19 movement restrictions may continue for a while yet.
The large-cap index was up 69.92 points, or 1.1%, at 6,559.25.
The mid-cap FTSE 250 index rose just 6.12 points to 21,073.12. The AIM All-Share index was down 2.84 points, or 0.2%, at 1,208.74.
The Cboe UK 100 index was up 1.0% at 651.97. The Cboe 250 was up 0.1% at 18,515.19 and the Cboe Small Companies up 1.4% at 12,645.45.
In mainland Europe, the CAC 40 in Paris was up 0.7% while the DAX 30 in Frankfurt was 0.3% higher.
Sterling was trading at USD1.3695 midday on Monday, down from USD1.3728 at the London equities close on Friday.
The euro stood at USD1.2037 midday London time, up from USD1.2025 at the European equities close on Friday. Against the yen, the dollar was trading at JPY105.60, improved from JPY105.45 at the London equity market close on Friday.
"US Treasury Secretary Janet Yellen's weekend claim that the country could return to full employment if Congress were to pass President Biden's USD1.9 trillion stimulus package gave markets a window into what such significant action could mean for the world's largest economy," AJ Bell Investment Director Russ Mould said.
US President Joe Biden's USD1.9 trillion pandemic relief package cleared a key Senate hurdle without support from the Republican opposition on Friday.
US futures were higher on Monday. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all were called up 0.4%.
Mould noted: "The positive sentiment also comes despite some concern about the efficacy of vaccines, notably the AstraZeneca and Oxford University jab, against the new South African variant of Covid."
Britons face needing a third jab this year amid concerns about the Oxford University and AstraZeneca vaccine's effectiveness against the South African coronavirus variant. South Africa has suspended the rollout of the British-designed vaccine to healthcare staff following the results, which have yet to be peer reviewed.
AstraZeneca shares were up 0.6%.
UK Vaccines Minister Nadhim Zahawi was forced to defend the vaccine after a new study in South Africa found it was not effective at preventing mild illness caused by the more infectious mutation.
The UK's vaccination programme has been speedier than many of its European counterparts. The number of people in the UK who have received a first dose of a vaccine passed the 12 million mark, with jabs administered at a rate of almost 1,000 per minute during a one-hour period over the weekend.
IG Markets Senior Market Analyst Joshua Mahony commented: "Airlines have been somewhat more sensitive to those vaccine questions, with the lack of protection against the South Africa strain meaning we are likely to see restrictions on travel sustained for some time yet to avoid greater imported cases."
British Airways parent International Consolidated Airlines Group slipped 0.3%. Among mid-caps, easyJet fell 2.6%. Bus and train operator First Group, also hit by UK travel restrictions, lost 3.6%.
Among the large caps, miner Anglo American was the best performer, up 4.6%. Peers BHP and Rio Tinto were up 3.4% and 2.4%, respectively.
BP rose 2.5% and Shell's A shares and B shares climbed 0.9% and 1.0%. The duo last week each posted losses in excess of USD20 billion for 2020.
Brent oil fetched USD60 a barrel for the first time in more than a year on Monday.
The North Sea benchmark was quoted at USD60.07 a barrel midday Monday, up from USD59.62 a barrel at the London equities close Friday. It reached a high of USD60.24 on Monday.
AJ Bell's Mould added: "Oil prices surged to pre-pandemic highs as traders of the commodity looked towards a potential recovery in demand. This could help add fuel to M&A chatter in the industry after it emerged ExxonMobil and Chevron had held talks over a combination last year.
"The last round of mega-mergers came a little over 20 years ago. However, this time round tie-ups could just double businesses' problems given the need to transition away from the traditional oil and gas assets which dominate their portfolios as part of a global transition away from fossil fuels."
In pre-market trade in New York, Exxon shares were up 1.2%, while Chevron was up 0.9%.
Gold fetched USD1,821.57 an ounce midday Monday, up from USD1,808.40 at the London market close on Friday.
Back in London, Arrow Global shares surged 26% on Monday, after it received a fourth takeover proposal from private equity firm TDR Capital. Arrow is a buyer of debt from banks, credit card companies and telecommunications businesses.
TDR said the latest proposal, made on Friday, prices Arrow Global shares at 305 pence, which the private equity firm said was a 36% premium to the company's 224.0p closing price on Thursday last week.
A 305p offer would value all of Arrow Global at roughly GBP540 million.
On Monday, Arrow Global shares were trading at 289.50p, valuing the firm at around GBP514.4 million.
Arrow's Group Chief Investment Officer Zachary Lewy "has entered into a binding letter of support", TDR said. The private equity firm noted "he is fully supportive of the fourth proposal".
Meanwhile, investment bankers continued their busy start to 2021, with more companies confirming or unveiling plans for a London float.
Auction Topco set out its plan for a London Main Market IPO in March, expecting to raise about GBP250 million, giving the online auction platform a GBP600 million enterprise value.
On AIM, Cornish Metals raised GBP8.2 million ahead of its start of trading on Tuesday next week. The funds will be used to develop its United Downs copper-tin project in Cornwall.
Announcing plans for an AIM float was AMTE Power, hoping to raise GBP7 million. The company develops lithium-ion battery cells for high-performance vehicles and other specialist uses at its manufacturing plant in Thurso, Scotland.
By Eric Cunha; ericcunha@alliancenews.com;
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