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London stocks rally on optimism over vaccine rollout

London stocks

The FTSE 100 added 1.2% at 6,665.50, after Japan’s Nikkei 225 surged past the 30,000 level for the first time in more than 30 years, while sterling gained 0.3% against the dollar at 1.3895

London stocks rallied on Monday, following a positive session in Asia, on optimism over the vaccine rollout.

The FTSE 100 rose 1.2% at 6,665.50, after Japan’s Nikkei 225 surged past the 30,000 level for the first time in more than 30 years.

Meanwhile, sterling rose 0.3% against the dollar at 1.3895.

Russ Mould, investment director at AJ Bell, said: Government attempts to manage expectations on Covid better are helpful to the market which is now probably pleasantly surprised at just how quickly the UK has vaccinated the most vulnerable sections of its population.

This is making it easier for investors to look through to a reopening of the economy even if the pace at which restrictions are eased remains a topic of fierce debate, Mould said.

He said, positive news for the UK is often a double-edged sword for the FTSE as it boosts the pound and thereby crimps the relative value of the overseas earnings which dominate the index. However, as this morning’s trading demonstrates, with sterling and the FTSE 100 both higher, an improved economic outlook domestically should still provide support to the UK’s flagship stock index.

In equity markets, engine maker Rolls-Royce gained after it hired former Deloitte partner Panos Kakoullis as chief financial officer to help the company through the crisis in the aviation industry amid the pandemic.

Mitchells & Butlers was on the rise after saying it plans to raise £350m through an open offer and had also reached agreement with its banks for a new £150m three-year year unsecured revolving credit facility to bolster its balance sheet.

Travel and leisure stocks more generally were in the black amid hopes that there will be a return to more normal life by spring following the swift vaccine rollout. Premier Inn owner Whitbread, caterer Compass Group, British Airways owner IAG, TUI, easyJet, Cineworld and WH Smith were all higher.

Banks also advanced, with Barclays, NatWest and Lloyds all firmer.

Auto Trader gained as Peel Hunt upgraded it to ‘buy’.

On the downside GlaxoSmithKline, AstraZeneca, Experian and Unilever were all weaker.

Moneysupermarket was knocked lower as Liberum downgrade it to ‘hold’.

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