LONDON MARKET CLOSE: Stocks Get Shot In Arm From Virus Treatment Hope

(Alliance News) - The FTSE 100 got off to a roaring start to the week after US President Donald Trump announced approval for a blood plasma treatment for Covid-19 patients.

The FTSE 100 index closed up 102.84 points, or 1.7%, at 6,104.73 on Monday. The FTSE 250 ended up 107.39 points, or 0.6%, at 17,685.07, and the AIM All-Share closed up 4.00 points, or 0.4%, at 960.96.

The Cboe UK 100 ended up 1.9% at 607.97, the Cboe UK 250 closed up 0.9% at 15,057.22, and the Cboe Small Companies ended down 0.8% at 9,503.89.

In European equities on Monday, the CAC 40 in Paris ended up 2.3%, while the DAX 30 in Frankfurt ended up 2.4%.

"An emergency injection of blood plasma from the FDA cured the markets of its Covid-19 concerns – for this Monday, at least," said Connor Campbell, financial analyst at Spreadex.

US President Donald Trump over the weekend announced the emergency authorisation of convalescent plasma for Covid-19 patients, after expressing frustration at the slow pace of approval for coronavirus treatments.

The announcement came after days of White House officials suggesting there were politically motivated delays by the Food & Drug Administration in approving a vaccine and therapeutics for the disease that has upended Trump's re-election chances.

On the eve of the Republican National Convention, Trump issued the emergency order, which would make it easier for some patients to obtain the treatment, in a news conference on Sunday, according to White House officials.

The blood plasma, taken from patients who have recovered from coronavirus and rich in antibodies, may provide benefits to those with the disease. But the evidence has been inconclusive as to how it works or how best to administer it.

In a letter describing the emergency authorisation, FDA Chief Scientist Denise Hinton, noted: "Covid-19 convalescent plasma should not be considered a new standard of care for the treatment of patients with Covid-19.

"Additional data will be forthcoming from other analyses and ongoing, well-controlled clinical trials in the coming months."

The push on Sunday came a day after Trump tweeted sharp criticism on the process to treat the virus, which has killed more than 175,000 Americans and imperilled his re-election chances.

Trump's announcement has raised hopes "that a solution may come to market faster than anticipated", said Craig Erlam at Oanda.

Stocks in New York were in the green at the London equities close, with the Dow Jones up 1.0%, the S&P 500 index up 0.7%, and the Nasdaq Composite up 0.4%.

Brent oil was quoted at USD44.88 a barrel at the London equities close Monday from USD43.84 late Friday.

Gold was quoted at USD1,933.88 an ounce at the London equities close Monday against USD1,941.70 at the close on Friday.

"Gold has given up earlier gains to trade down a little on the day, around USD1,930, off around USD9 from Friday's close. The reversal has come as the dollar pared earlier losses to trade only marginally lower on the day. The rebound in the dollar has been impressive after breaking key support last week and today's rebound is another example of that," said Oanda's Erlam.

The pound was quoted at USD1.3075 at the London equities close Monday, soft compared to USD1.3090 at the close on Friday.

The euro stood at USD1.1802 at the European equities close Monday, higher than USD1.1785 at the same time on Friday. Against the yen, the dollar was trading at JPY105.93, slightly higher compared to JPY105.89 late Friday.

In London, the FTSE 100 got a lift as BT shares rallied 7.1% after Sky News reported over the weekend that the telecommunications firm is preparing to defend itself against takeover approaches.

According to Sky News, BT has asked bankers at Goldman Sachs to update its bid defence strategy in recent weeks. However, the article said the former UK state monopoly has not yet received a formal approach from any potential suitor.

Bunzl shares rose 2.6% after the distribution and logistics firm said it delivered a resilient performance in the first half despite the unprecedented challenges posed by the Covid-19 pandemic.

For the half-year to June 30, revenue rose 7.0% to GBP4.85 billion from GBP4.53 billion last year, and pretax profit was up 22% to GBP245.4 million from GBP200.5 million.

Bunzl raised its interim dividend 1.9% to 15.8 pence from 15.5p paid out last year and also reinstated a previously skipped dividend. As a result of the better-than-expected trading performance during the first half of the year, Bunzl decided to reinstate and pay the final dividend for 2019 at the same level as originally proposed of 35.8p.

Bunzl said that, as it is no longer possible for this dividend to be approved by shareholders at the annual general meeting, it will be paid as an additional interim dividend in November.

Shares in mid-cap JD Wetherspoon ended down 3.1%. The pub operator said it expects to make a loss in its most recent financial year, both before and after exceptional items relating to the Covid-19 pandemic and its associated lockdown.

The company also fought back against what it called "irresponsible and untrue" media reports and comments by UK members of Parliament about the pub chain's operations in the aftermath of the Covid-19 lockdown.

Wetherspoon hit out at a "large number of harmful media misrepresentations" in the national press and on social media. It said claims that it was "allowing overcrowding" at its pubs were "irresponsible and untrue".

With the exception of a small number of development sites and pubs in airports and stations, Wetherspoon reopened all of its pubs in England, Scotland and Wales as soon as it had permission. Some of these airport and station pubs have now reopened as well, although a few are still closed. Of its 873 total pubs, 844 are now open.

Like-for-like, bar and food sales were down 17% for the 44 days ended August 16. Sales have improved gradually but with a recent rapid acceleration thanks to subsidised food, coffee and soft drinks as well as more outside seating.

It was referring to the UK government's 'Eat Out to Help Out' scheme that give up to GBP10 off meals on Mondays, Tuesdays and Wednesdays during August. However, Wetherspoon is expecting "a period of more subdued sales once the scheme for subsidised early-week meals and drinks ends."

Russ Mould, investment director at AJ Bell, commented: "Guidance that it will report a loss in its most recent financial year won't be a surprise given the considerable disruption to trading. What really matters now is how the business fares without the sales incentive and if it can avoid pushing up prices to help claw back some of the lost revenue from earlier this year."

easyJet ended up 3.9% after Mainfirst bumped up the airline to Buy from Sell.

The UK corporate calendar for Tuesday has interim results from investment firm Apax Global Alpha and marine engineering company James Fisher & Sons, and annual figures from technical plastic products company Carclo.

In Tuesday's economic calendar, there is German GDP at 0700 BST and US new home sales and consumer confidence, both at 1500 BST.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.