LONDON MARKET CLOSE: Stocks rise as roadmap out of UK lockdown begins

(Alliance News) - Stocks in London ended higher on Monday as investors grew increasingly confident in the UK's economic prospects as the reopening gets underway.

The first stage of UK Prime Minister Boris Johnson's roadmap out of lockdown took its course on Monday, with the return of pupils to classrooms and limited social contact.

Restrictions are due to end on June 21 with the removal of all legal limits on social contact and the reopening of nightclubs, theatres and other large venues.

The FTSE 100 index closed up 88.61 points, or 1.3%, at 6,719.13. The FTSE 250 ended up 248.91 points, or 1.2%, at 21,204.69. The AIM All-Share ended marginally lower at 1,162.57.

The Cboe UK 100 ended up 1.4% at 670.60, the Cboe UK 250 closed up 1.3%, at 18,915.58, the Cboe Small Companies ended 0.7% higher at 13,629.30.

In Paris the CAC 40 ended up 2.1%, while the DAX 30 in Frankfurt ended 3.3% higher.

"In Europe the signs of reflationary bounce are there, with the Dax in particular smashing through levels that have held the index back for the year so far. In London the FTSE 100 is making another run at 6,700, having also struggled to make headway since the early days of January," said IG Group's Chris Beauchamp. "All the talk of a cyclical rebound has not been reflected in the overall index, which has found itself under pressure for most of 2021 to date, but now the optimism surrounding the global rebound seems to have returned, with a general rebound in global stock markets now underway."

In the FTSE 100, travel-related stocks and hospitality firms ended in the green as the crucial summer holiday period for the industry draws closer.

Aviation aftermarket services providers Rolls-Royce and Melose Industries closed up 7.3% and 5.7% respectively, while British Airways parent International Consolidated Airlines ended up 3.0%. Whitbread and InterContinental Hotels ended up 4.3% and 5.5% respectively.

"The resilience of travel stocks is also probably down to this same optimism over reopening, with a UK death rate that fell below 100 for the first time since October at the weekend, with a feeling that if the data allows, and it's a big IF, that the re-opening program might get accelerated," CMC Markets analyst Michael Hewson said. "This optimism is not only helping the likes of Intercontinental Hotels, and Premier Inn owner Whitbread, but airlines are also having a good day as well, along with Rolls Royce shares which have edged to the top of the FTSE 100."

Pearson closed up 6.4% after the education publisher maintained its payout and posted a profit rise helped by one-off gains.

In 2020, Pearson's revenue fell 12% to GBP3.40 billion from GBP3.87 billion in 2019. Pretax profit, however, was up 53% to GBP354 million from GBP232 million. It left its dividend unchanged at 19.5p per share.

The company also set out a new digital-focused strategy, amid a market shift to online learning.

At the other end of the large-caps, London Stock Exchange Group was the worst performer as the exchange operator extended Friday's 14% decline - to close down 6.8%.

In the FTSE 250, Network International ended the standout performer, up 14%. The payments solutions provider said its profit fell sharply in 2020, but it has experienced an improvement in demand toward the year-end.

Going forward, the company said, whilst the fluidity of the pandemic creates some uncertainty, it expects 2021 total revenue to return to the level recorded in 2019.

The dollar was higher against major counterparts as investors flocked to the greenback's safe-haven appeal. The pound was quoted at USD1.3810 at the London equities close, marginally lower from USD1.3813 at the London equities close on Friday.

The euro stood at USD1.1862 at the European equities close, down from USD1.1912 late Friday. Against the yen, the dollar was trading at JPY108.82, up sharply from JPY108.21 late Friday.

Stocks in New York were higher at the London equities close on optimism that a massive financial aid package in the US is heading towards enactment.

The DJIA was up 1.3%, the S&P 500 index up 0.7% and the Nasdaq Composite up 0.2%.

The US Senate on Saturday voted to approve a USD1.9 trillion relief package in what President Joe Biden called a "giant step" towards reviving the pandemic-stricken American economy, capping frenzied negotiations and a marathon overnight voting session.

Passed by 50 votes to 49 in a strict party line vote, the sweeping legislation now heads back to the Democratic-majority House of Representatives, where it is expected to be adopted, barring a last-minute setback.

"I promised the American people help was on the way," said Biden in an address from the White House, after the plan was approved along strict party lines.

Brent oil was quoted at USD68.55 a barrel at the equities close, lower from USD68.74 at the close Friday. However, the North Sea benchmark breached USD70 per barrel for the first time since January 2020 in early trade after an attack on energy facilities in Saudi Arabia.

Brent peaked at USD71.38 before falling back under USD70 per barrel.

The strike on the Aramco facilities - including one of the world's biggest oil ports - by Yemen's Huthi rebels Sunday followed the bombing of the country's capital Sanaa by a Saudi-led military coalition.

Gold was trading at USD1,682.85 an ounce at the London equities close, lower against USD1,697.43 late Friday.

The economic events calendar on Tuesday has Germany trade figures at 0700 GMT and eurozone GDP readings at 1000 GMT.

The UK corporate calendar on Tuesday annual results from investment managers M&G and Standard Life Aberdeen, broadcaster ITV, interdealer broker TP ICAP and from Domino's Pizza.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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