LONDON MARKET CLOSE: Stocks climb as EU watchdog backs Astra jab

(Alliance News) - European stocks closed higher on Tuesday, as equities largely shrugged off concerns about the pace of the EU's vaccine rollout, after health regulators again offered their support to AstraZeneca's Covid-19 jab.

Sentiment was largely positive before focus shifts to Wednesday's US Federal Reserve interest rates decision.

Pandemic-recovery plays were higher in London, as was AstraZeneca, amid the regulatory vote of confidence and after securing a bumper US order. Germany's DAX 30 at one point hit record highs and was boosted by Volkswagen, after investors reacted positively to the carmaker's annual earnings.

The FTSE 100 index closed up 53.91 points, or 0.8%, at 6,803.61. The FTSE 250 ended up 242.14 points, or 1.1%, at 21,764.49. The AIM All-Share rose 7.63 points, or 0.6%, at 1,206.97.

The Cboe UK 100 ended up 0.8% at 677.68, the Cboe UK 250 closed up 1.1% at 19,373.99, and the Cboe Small Companies ended up 0.1% 13,957.67.

"Positive comments surrounding the Oxford/AstraZeneca vaccine appeared to give Europe a boost, despite a slow start from the US. Following yesterday's suspension of the preparation in France, Germany and Italy, the European Medicines Agency has stated there is 'no indication' the small number of blood clotting cases seen by people who have received the vaccine were caused by the dose itself," Spreadex analyst Connor Campbell commented.

In New York, the Dow Jones Industrial Average and S&P 500 hit record highs on Monday. They gave up some gains on Tuesday, however. The DJIA was down 0.5% and the S&P 500 0.1% lower at the time of London equity market close. The Nasdaq Composite was up 0.4%.

"Investors are looking forward to Wednesday's outcome of the FOMC meeting, which starts today. Ahead of this, sentiment towards risk remains overall positive thanks the recently passed USD1.9 trillion US fiscal stimulus and hopes that the economic recovery will accelerate in the coming months as lockdowns are slowly lifted," ThinkMarkets analyst Fawad Razaqzada said.

"The FOMC will provide us with fresh economic and interest-rate projections on Wednesday. It is reasonable to assume that the Fed will not want to scare the markets by being too hawkish, but the devil will be in the detail or details of those economic and interest rate projections. The Fed can't allow inflation to run too hot for too long."

In Paris, the CAC 40 rose 0.3%, while Frankfurt's DAX 30 climbed 0.7%. The DAX hit an intraday best of 14,601.79 points, a record high.

"Gains in the Dax are being supported by upbeat earnings from both Zalando and Volkswagen as well as a higher than forecast ZEW sentiment index. German ZEW economic sentiment jumped to 76 in March, well ahead of February's 71.2 and the 74 expected," OANDA analyst Sophie Griffiths said.

The euro stood at USD1.1894 at the European equities close Tuesday, down from USD1.1931 on Monday. Against the yen, the dollar was trading at JPY109.02, down from JPY109.08.

The pound was quoted at USD1.3886 at the London equities close Tuesday, largely unchanged from USD1.3885 on Monday. Sterling fell to an intraday low of USD1.3808, however, which was a helpful tailwind for London's internationally exposed FTSE 100.

Jet engine maker Rolls-Royce, beleaguered by the pandemic, rose 4.2% on Tuesday. Among the best large-cap performers.

Property firms British Land and Land Securities rose 4.6% and 4.0%. Office, retail and leisure assets have been hit by stay-at-home measures during the pandemic. In the FTSE 250s, Hammerson rose 13%.

The shopping centre owner posted plans to convert a flagship Debenhams store in Leicester into 300 residential units.

AstraZeneca rose 3.2%. The EU's drug regulator said Tuesday it remained "firmly convinced" of the benefits of the drugmaker's coronavirus vaccine despite several countries suspending its use over blood clot fears.

The company also extended an existing agreement with the US government to supply up to 500,000 additional doses of AZD7442, a Covid-19 antibody.

"The value of the extended agreement is USD205 million and is contingent on AZD7442 receiving Food & Drug Administration emergency use authorisation," Astra added.

Brent oil was quoted at USD68.28 a barrel at the London equity market close, down from USD68.70 on Monday.

Oil majors lost out. Royal Dutch Shell's 'A' shares fell 1.7% and its 'B' shares lost 1.8%. BP fell 1.6%.

"WTI and Brent crude oil are in the red this afternoon as traders are keen to trim their exposure to the oil market seeing as there are mild concerns the eurozone's economic recovery might be hampered by the pausing of the vaccine distribution. It is worth noting that oil hit a 14-month last week so some traders are quick to use any excuse as book profits," CMC Markets analyst David Madden commented.

An ounce of gold fetched USD1,729.46, inching down from USD1,730.28 late Monday.

Wednesday's economic agenda will be dominated by the US Federal Reserve's latest interest rate decision at 1800 GMT.

The Fed faces a tough balancing act this week, against an improving economic backdrop and market worries over bond yields and inflation expectations. The Fed is likely to raise its growth forecasts this week, but keep policy unchanged.

Elsewhere, eurozone consumer price data is due at 1000 GMT.

London's local corporate calendar has annual results from funeral services provider Dignity and iron ore pellet producer Ferrexpo on Wednesday.

By Eric Cunha; ericcunha@alliancenews.com

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