LONDON MARKET CLOSE: Stocks End Higher As Vaccine Rally Continues

(Alliance News) - Stocks in London finished higher on Wednesday as Covid-19 vaccine optimism persisted, with the possibility of a sustained economic recovery now on the horizon.

Fawad Razaqzada, market analyst with ThinkMarkets, said: "Monday's announcement from Pfizer on the progress made in the coronavirus vaccine seems to have been a game changer, even if experts warn that production and distribution may take time. With ongoing central bank and government stimulus providing support, economic recovery could rebound strongly if things go back to normal next year. That's what the markets are pricing in right now, and ignoring the current economic situation, as a result of the lockdowns and the pandemic."

The FTSE 100 index closed 1.4%, or 85.25 points higher at 6,382.10. The FTSE 250 ended 1.6%, or 311.85 points higher, at 19,340.19, and the AIM All-Share closed 1.1%, or 10.39 points higher, at 995.47.

The BATS UK 100 ended up 1.4% at 636.66, the BATS 250 closed up 1.9% at 16,620.71, and the BATS Small Companies ended 0.6% higher at 10,607.60.

Stocks in New York were in the green at the London equities close. The DJIA was 0.2% higher, the S&P 500 index 0.8% higher, and the Nasdaq Composite up 1.6%.

"Today saw the FTSE trade at a five-month high, after staging one of its sharpest three-day rallies in years. The UK index, which had underperformed global and US indices badly since the initial round of lockdowns earlier in the year, has benefited from rotation into value stocks and away from growth and stay-at-home tech plays that had lifted the Nasdaq to repeated all-time highs."

In Paris the CAC 40 ended up 0.5%, while the DAX 30 in Frankfurt ended 0.4% higher.

On the London Stock Exchange, Flutter Entertainment finished 5.0% higher after it said its performance in the third quarter exceeded expectations, allowing the bookmaker to increase its earnings guidance for 2020.

In the three months to September, Flutter's total revenue jumped 27% year-on-year to GBP1.33 billion from GBP1.04 billion. Sports revenue ballooned 32% to GBP798 million, and Gaming revenue grew 21% to GBP527 million.

Flutter noted it saw a 33% rise in online revenue growth, with average daily customers up 41%.

Looking ahead, Flutter is guiding for 2020 earnings before interest, taxes, depreciation and amortization - excluding the US - between GBP1.28 billion and GBP1.35 billion, which is up from previous guidance of GBP1.18 billion from GBP1.33 billion. Flutter noted this outlook is based on the UK not extending the second national lockdown beyond December 2.

In the US, Flutter expects to generate net revenue of over USD850 million in 2020, due to the better-than-expected new customer volumes. Increased investment in customer acquisition is expected to lead to an EBITDA loss there of GBP160 million to GBP180 million, the group formerly known as Paddy Power Betfair said.

BAE Systems ended 2.3% higher, after reporting that its trading in the second half has been "resilient" amid "challenging times".

For 2020, BAE said its sales and cashflow guidance remains unchanged from what it offered in its interim results at the end of July. Sales were guided then to increase by a low-single digit percentage from 2019, when BAE reported revenue of GBP18.3 billion. Cashflow was guided at GBP800 million - excluding a GBP1 billion pension payment.

Underlying earnings per share are now expected to be slightly higher than previously guided with good operational performance and an expected lower tax rate offsetting the negative foreign exchange impact. Previously, BAE guided for underlying earnings per share to fall by a mid-single digit percentage from 2019's figure of 45.8 pence.

Coca-Cola HBC ended 2.3% higher, having said trading in the third quarter of the year was still down on the year prior, but it saw some improvement with recovery in the out-of-home channel and more growth in the at-home channel.

Coca-Cola HBC is a soft drinks bottler with operations in 28 countries, including Greece, Ireland, Poland and Nigeria. It is a strategic partner of US brand owner Coca-Cola Co.

The Steinhausen, Switzerland-based company said group volume was down 1.4% year-on-year in the third quarter ended September 30 to 613.7 million unit cases from 622.4 million unit cases.

Net sales revenue was down 6.7% to EUR1.83 billion from EUR1.96 billion a year prior. Sales revenue in the nine months to September 30 was down 12% to EUR4.66 billion from EUR5.31 billion a year before.

In economic news, the first vaccinations in the EU against Covid-19 could take place in the first quarter of 2021 in an optimistic scenario, the head of the EU health agency told AFP on Wednesday.

"I think optimistically first quarter next year, but I can't be more precise," Andrea Ammon, the director of the Stockholm-based European Centre for Disease Prevention & Control, said in an interview.

A European source told AFP on Tuesday that a vaccine could be authorised for use in the EU in "early 2021", after the announcement that US pharmaceutical group Pfizer and Germany's BioNTech's vaccine had shown 90% effectiveness in phase three trials.

The pound was quoted at USD1.3199 at the London equities close, down from USD1.3224 at the same time on Tuesday.

The euro stood at USD1.1763 at the European equities close, down from USD1.1817 a day before.

Against the yen, the dollar was trading at JPY105.57, up from JPY105.27 late Tuesday.

Brent oil traded higher and was quoted at USD44.30 a barrel at the equities close from USD43.08 at the same time the prior day.

Gold was trading lower, with little appetite for the safe haven asset amid vaccine optimism. An ounce of the precious metal was quoted at USD1,863.53 an ounce at the London equities close against USD1,882.66 on Tuesday.

The local economic calendar has UK GDP at 0700 GMT, the same time as the UK index of production print and UK trade. Ireland's consumer price index reading is due at 1100 GMT. Elsewhere, EU industrial production is due at 1000 GMT, and German CPI at 0700 GMT. The afternoon sees US initial jobless out at 1330 GMT.

The corporate calendar for Thursday has half-year results from luxury fashion brand Burberry, discount shop chain B&M European Value, power transmission and distribution company National Grid and private equity and infrastructure investor 3i Group.

By Anna Farley; annafarley@alliancenews.com

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