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(Alliance News) - The FTSE 100 surged ahead of European counterparts on Monday while the pound rallied to its best levels since April 2018 as the UK hit a vaccine milestone.
The FTSE 100 index closed up 166.32 points, or 2.5%, at 6,756.11. The FTSE 250 ended up 381.43 points, or 1.8%, at 21,418.90, and the AIM All-Share closed up 7.68 points, or 0.6%, at 1,227.53.
The Cboe UK 100 ended up 2.8% at 672.09, the Cboe UK 250 closed up 1.9% at 18,854.19, and the Cboe Small Companies ended up 0.7% at 12,744.46.
London's blue-chip FTSE 100 charged ahead on Monday, led by oil majors, miners and travel stocks.
"Natural resource stocks are benefitting from the wider optimism that the global economy will recover and in turn, mineral demand will rise. In light of the news that Britain is making great progress in terms of rolling out vaccines, there is chatter the country will begin to ease up on restrictions sooner rather than later. There is a growing sense the country will be allowed to slowly re-open in the next few weeks or months, which should spark economic activity," said David Madden, market analyst at CMC Markets.
UK Prime Minister Boris Johnson pledged a "cautious but irreversible" approach to easing the lockdown and said no decisions have been made on whether all pupils can return to school at the same time.
The prime minister stressed the need to be "very prudent" as ministers begin reviewing coronavirus restrictions in England, while lockdown-sceptical Tory MPs pressure for a swift reopening. Johnson is preparing to set out his "roadmap" for relaxing measures on February 22, with March 8 earmarked for schools to start reopening to all pupils.
This comes as Johnson hailed a "significant milestone" after more than 15 million people received their first dose of a vaccine. The passing of the 15 million vaccinations mark paves the way for the next phase of the the rollout – covering the next five priority groups, including the over 50s -to begin.
The government is aiming to get an offer of a vaccine to the estimated 17 million people in the next five groups by the end of April.
The pound was quoted at USD1.3909 at the London equities close Monday, trading around its best levels since April 2018 and up from USD1.3847 at the close on Friday.
Amid the UK's vaccine effort, shares in oil majors BP and Royal Dutch Shell soared. BP shares closed up 7.9% while Shell 'A' and 'B' shares gained 7.4% and 7.6% respectively.
Brent oil was quoted at USD63.33 a barrel at the London equities close Monday, sharply higher from USD61.53 late Friday on hopes that the rollout of Covid-19 vaccines will boost energy demand.
Miners also rallied with Glencore closing up 7.0%, BHP up 6.4% and Anglo American up 6.2%. Spot copper was trading at USD8,383.60 a tonne on Monday afternoon, up from USD8,318.00 late Friday.
CMC's Madden also noted: "If restrictions are loosened, travel, airline and leisure stocks would arguably have the most to benefit."
British Airways parent International Consolidated Airlines finished Monday's session at the top of the FTSE 100, surging 9.3%, while jet engine maker Rolls-Royce climbed 4.8%.
Hopes of relaxed rules for the travel industry come as the UK's hotel quarantine regime begins. UK and Irish nationals and UK residents returning to England from 33 "red list" countries – hotspots with Covid-19 variants in circulation – are required to quarantine in hotels for 10 days.
The government has struck deals with 16 hotels so far, providing 4,963 rooms, with a further 58,000 rooms currently on stand-by, the Department of Health & Social Care said. The cost for a quarantine hotel stay is GBP1,750 for a single adult.
In the FTSE 250, cinema operator Cineworld surged 13% and SSP, an operator of food and beverage concessions in travel locations, gained 12%.
Chris Beauchamp, chief market analyst at IG, commented: "One of today's big FTSE winners lies outside the sectors mentioned above, and that is Compass Group. Any firm connected with catering and outsourcing services around the globe will be a prime beneficiary of a general return to normality."
Compass shares rallied 7.6% on Monday.
Safe haven assets suffered as stocks charged ahead on Monday. Against the yen, the dollar was trading at JPY105.36, higher compared to JPY104.95 late Friday. Gold softened to USD1,819.49 an ounce at the London equities close Monday against USD1,828.25 at the close on Friday.
In European equities on Monday, the CAC 40 in Paris ended up 1.5%, while the DAX 30 in Frankfurt ended up 0.4%.
The euro stood at USD1.2129 at the European equities close Monday, firming against USD1.2120 at the same time on Friday.
The eurozone's industrial output was lower than expected in December, though the single currency area's its trade surplus widened to a greater extent than it expected at the end of the year, data showed.
According to Eurostat, the eurozone's industrial production fell 1.6% monthly in December, following 2.6% growth in November. December's fall was larger than expected, consensus cited by FXStreet forecast a 0.6% drop. Annually, output fell 0.8% in December, following November's 0.6% fall. The yearly fall for December was expected by the market to be just 0.1%.
Financial markets in the US are closed on Monday for the Presidents' Day holiday.
In the economic calendar for Tuesday, there is eurozone gross domestic product at 1000 GMT and the ZEW survey for Germany and the euro area due at the same time. Markets in Shanghai will remain closed for the Lunar New Year holiday on Tuesday, though Hong Kong will re-open.
The UK corporate calendar on Tuesday has full-year results from miner Glencore and interim results from peer BHP.
By Lucy Heming; lucyheming@alliancenews.com
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