(Alliance News) - Stocks in London returned from the long Easter weekend in strong fashion, buoyed by UK Prime Minister Boris Johnson insisting he would not deviate from his road map out of lockdown despite warnings from scientific advisers that the plan could result in a third wave of coronavirus cases and deaths.
The FTSE 100 ended up 86.25 points, or 1.3%, at 6,823.55. The mid-cap FTSE 250 index closed up 261.81 points or 1.2%, at 21,994.48. The AIM All-Share index ended up 1.2% at 1,223.43.
The Cboe UK 100 index advanced 1.2% at 679.95. The Cboe 250 ended up 1.2% at 19,657.51. The Cboe Small Companies closed up 1.1% at 14,098.64.
"The FTSE is playing catch-up after yesterdays US market outperformance. With Boris Johnson confident that the reopening process can go ahead as planned, we are seeing domestically-focused names at the forefront of the gainers," IG's Joshua Mahony said.
The Scientific Pandemic Influenza Group on Modelling group, which advises the UK government, produced a paper dated March 31 showing an increase in hospital admissions and fatalities is "highly likely" during the later stages of the UK's road map out of lockdown.
Johnson has already confirmed April 12 will see the next step along the road map, with shops, pub beer gardens, gyms and hairdressers among premises allowed to reopen.
The Spi-M panel's assessment was that any resurgence in hospital admissions and deaths following next Monday's easing of lockdown was "highly unlikely" to put unsustainable pressure on the NHS.
But "it is highly likely that there will be a further resurgence in hospitalisations and deaths after the later steps" of the road map, the Spi-M assessment said.
In mainland Europe, the CAC 40 in Paris advanced 0.5% and the DAX 30 in Frankfurt closed 0.7% higher.
In London, travel firm Stagecoach, cinema operator Cineworld, shopping centre owner Hammerson, and Card Factory were all enjoying a solid bounce from the UK reopening plans.
"It is clear that investors are confident of a domestic bounceback. Unfortunately questions remain regarding international travel, for while the reopening schedule remains unchanged, Johnson's reluctance to provide a firm go-ahead for May 17 flights further delays any potential bout of fresh bookings. Nevertheless, with the vaccination programme successfully bringing down transmissions rates, there is reason for optimism around UK reopening process," Mahony continued.
Cineworld and Stagecoach advanced 5.7%, Hammerson 5.1%, and Card Factory 2.9%. Sitting towards the bottom of the blue chip index, Ocado and Just Eat Takeaway, which have benefited from lockdown restrictions, lost 0.7% and 1.1% respectively after Johnson on Monday confirmed non-essential stores, restaurants, hairdressers and pub beer gardens will reopen from April 12 in England.
Johnson said he plans to stick "like glue" to his plan for easing restrictions despite scientific advisers warning it could create a wave of Covid infections akin to that seen during spring last year.
Pub operators JD Wetherspoon and Marston's advanced 2.9% and 0.5% respectively.
Adding to positive mood, China's services sector posted stronger growth in March, with hiring also picking up and optimism surging to its highest level in over 10 years.
The Caixin headline seasonally adjusted business activity index posted 54.3 points in March, improved from 51.5 in February. It was further above the 50.0 no-change mark, suggesting growth quickened in March.
Among FTSE 100 miners, Rio Tinto added 2.7%, BHP closed up 2.4%, Anglo American 2.2%, Glencore 2.1% and Antofagasta gained 3.8%.
BP added 3.5% after the oil major hit its USD35 billion net debt target during the first quarter of 2021, due to the early delivery of disposal proceeds and a positive operating performance, paving the way for share buybacks.
BP had previously guided that it would get its debt down to USD35 billion by the end of 2021. It had said net debt actually was expected to increase during the first half, due to severance payments, a payment to Norway's Equinor for the completion of their US offshore wind joint venture, and BP's annual USD1.2 billion Gulf of Mexico oil spill redress payment.
On reaching this net debt target, BP said it is committed to returning at least 60% of surplus cash flow to shareholders by way of share buybacks, for which it announce further details at its first quarter results on April 27.
AstraZeneca was able to shake off a top official in the European Medicines Agency said in an interview published Tuesday that there is a link between the AstraZeneca coronavirus vaccine and blood clots.
EMA head of vaccines Marco Cavaleri told Italy's Il Messaggero newspaper that "in my opinion, we can say it now, it is clear there is a link with the vaccine", although it was not clear what caused such a reaction.
Astra added 0.2% Tuesday.
Sitting at the bottom of the midcaps, HomeServe lost 3.6% after the home emergency cover provider said adjusted pretax profit for the 2021 financial year increased in line with consensus expectations, while its UK customer base shrank.
Adjusted pretax profit for the financial year that ended March 31 is expected to be around GBP191 million, up 5.5% from GBP181.0 million the previous year, HomeServe said. The home repairs company reported 6.8% organic customer growth in North America, to 4.7 million from 4.4 million. However, its number of UK customers fell 11% to 1.6 million from 1.8 million.
In the US, Wall Street was searching for direction, with the Dow Jones Industrial Average was down 0.1%, the S&P 500 up 0.1% and Nasdaq Composite up 0.3%.
The Dow Jones and S&P 500 indices set new record highs on Monday, after data on Friday last week showed far more US jobs than expected were created in March, reinforcing the view of a strong recovery.
IG's Mahony said: "European markets have led the way higher today, as US markets struggled to maintain the bullish momentum seen throughout yesterday's session. The dollar has been under pressure after a period of outperformance, with weakness for the greenback helping to lift commodity prices. The recent pullback in treasury yields has provided a brief period of strength for precious metals, with gold continuing to build on the gains seen over the past week."
The dollar was lower against major counterparts. The pound was quoted at USD1.3848 at the equities on Tuesday, firm from USD1.3830 at the London equities close Thursday, though easing from an intraday high of USD1.3920.
The euro was priced at USD1.1843, up from USD1.1765 late Thursday. Against the yen, the dollar was trading at JPY109.83, lower from JPY110.60.
"Meanwhile, crude oil has been the big outperformer over the course of the day, with energy prices holding up well despite Thursday's OPEC decision to raise production in May to July. Much of the upside seen over the course of the past year has been built on expected demand, but energy markets could be in for significant volatility as we wait to see if that demand is finally coming to fruition," Mahony added.
Brent oil was quoted at USD63.42 a barrel on Tuesday evening, down from USD63.63 late Thursday in London. Gold was trading at USD1,744.00 an ounce, higher against USD1,728.70.
The economic events calendar on Wednesday there is a slew of service PMI data, with Ireland overnight, France at 0850 BST, Germany at 0855 BST, eurozone at 0900 BST, and the UK at 0930 BST. Elsewhere, minutes from the most recent US Federal Reserve meeting are released at 1900 BST.
In the UK corporate calendar, cruise operator Carnival and cybersecurity firm Avast will issue first quarter results, while over-50s insurer Saga and food packaging company Hilton Food will release full-year results.
By Paul McGowan; paulmcgowan@alliancenews.com
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