(Alliance News) - Stock prices in London opened higher on Monday spurred by optimism over the development of a Covid-19 vaccine, while Boohoo's woes continued after a report that a high-profile shareholder sold shares in the fashion company.
Investors welcomed comments from the head of German biotech firm BioNTech who said a vaccine candidate would be ready for regulatory review by the end of the year, while Gilead Sciences said its drug remdesivir had been relatively effective in clinical trials.
Equity markets have shrugged off grim infection news from the US amid ongoing optimism regarding the timeline for the discovery and roll-out of an effective vaccine.
The US, the country hardest hit by the coronavirus pandemic, on Sunday recorded 59,747 new cases over the last 24-hour period, according to a tally from Johns Hopkins University. The number of cases in the US has rocketed in recent weeks, hitting a record of 66,528 in 24 hours on Saturday.
Florida has shattered the US record for the largest single-day increase in positive coronavirus cases in any state since the beginning of the pandemic. It added more than 15,000 cases to its total as the daily average death toll also continued to rise. The numbers come at the end of a grim, record-breaking week as Florida reported 514 fatalities – an average of 73 per day. Three weeks ago, the state was averaging 30 deaths per day.
"On Friday, Covid drug news sent stocks rallying into the weekend. A study on Remdesivir showed that the drug reduced coronavirus fatalities by 62%. Boosting sentiment further Pfizer and BioNTech announced hat their vaccine could be approved by the Food & Drug Association as soon as December. A vaccine is the quickest and surest way for the economy to bounce back to pre-corona levels, which explains why the market is so sensitive to any vaccine news flow," said City Index analyst Fiona Cincotta.
The FTSE 100 index was up 66.05 points, or 1.1%, at 6,160.71 early Monday. The mid-cap FTSE 250 index was up 183.95 points, or 1.1%, at 17,365.65. The AIM All-Share index was flat at 883.48.
The Cboe UK 100 index was up 1.1% at 613.68. The Cboe 250 was up 0.6% at 14,626.10, and the Cboe Small Companies was flat at 9,170.59.
In mainland Europe, the CAC 40 in Paris was up 1.1%, while the DAX 30 in Frankfurt was up 1.2%.
In the FTSE 100, Legal & General was up 2.5% after Bank of America raised the insurer to Buy from Neutral.
In the FTSE 250, Carnival was up 4.5% after the cruise line operator said late Friday that it swung to an interim loss as its operations halted due to the coronavirus pandemic but painted an optimistic picture for investors which including restarting operations in August.
Wizz Air was up 1.7% after the Hungarian airline said Wizz Air Abu Dhabi, which has been granted national airline status by the United Arab Emirates, will start operations on October 1. The airline will base two new Airbus A321neo aircraft in Abu Dhabi, with an initial network of six new routes to Alexandria, Athens, Kutaisi, Larnaca, Odesa and Yerevan.
Wizz Air Abu Dhabi is a joint venture between state-owned ADQ and the low-cost Eastern Europe-focused airline. It is the Wizz Air's first airline established outside of Europe. Wizz Air said four additional Airbus A321neo aircraft will be allocated in the first 6 months of operation.
On AIM, Boohoo Group was down another 13% after shareholder Aberdeen Standard Investments sold most of its shareholding in the online clothing retailer over allegations of poor working conditions in its supply chain, the Times reported late Friday.
According to the newspaper, the asset manager has sold 27 million shares, equivalent to two-thirds of its stake.
The Sunday Times previously had reported allegations that workers in Leicester's Jaswal Fashions factory making clothes for Boohoo brand Nasty Gal were being paid as little as GBP3.50 an hour and operating without social distancing measures in place. Boohoo, in response, on Wednesday last week had distanced itself from Jaswal Fashions and had said that while it has seen "non-compliance" with its code of conduct, it has not seen evidence of its suppliers paying workers GBP3.50 per hour.
Boohoo shares are down 42% since mid-June.
Boohoo peer Quiz was down 5.1% on Monday, after the fashion brand said it believes that one of its Leicester-based suppliers has used a subcontractor at the centre of allegations over breaches to the national living wage. The brand said it is "extremely concerned" by a report in the Times over the weekend that its clothes are being made in a factory where prospective staff are being paid as little as GBP3 an hour.
The Japanese Nikkei 225 index ended up 2.1% on Monday. In China, the Shanghai Composite ended up 1.8%, while the Hang Seng index in Hong Kong is up 0.6%.
The pound was quoted at USD1.2631 early Monday, down from USD1.2661 at the London close on Friday.
The UK government pledged GBP705 million to prepare its borders for cutting ties with the EU on December 31, amid concern within Westminster that it is not ready. The money will fund new border posts, IT systems and 500 new staff to both ensure security and handle new customs controls after Britain leaves the EU's single market and customs union, the government said in a statement.
The UK ended its EU membership on January 31, almost four years after the historic Brexit vote, but agreed a standstill transition period until the end of the year while it tries to negotiate a new trade deal with Brussels. Citing the disruption caused by the coronavirus outbreak, London has already said it will not immediately introduce checks on EU imports, instead delaying them until July.
The euro was quoted at USD1.1321, flat from USD1.1317. Against the yen, the dollar was trading at JPY106.90, down from JPY107.75
Brent oil was quoted at USD42.50 a barrel Monday morning, lower from USD42.72 late Friday. Gold was quoted at USD1,807.25 an ounce, up from USD1,801.62.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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