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London stocks rise as investors await US stimulus news

FTSE 100

The FTSE 100 gained 0.53% at 6,523.53, and the FTSE 250 added 0.09% at 21,086.55

London stocks closed in positive territory on Monday, as coronavirus cases declined and investors cheered the prospect of further US stimulus.

The FTSE 100 ended the session up 0.53% at 6,523.53, and the FTSE 250 was 0.09% firmer at 21,086.55.

Sterling was in the black against its major trading pairs too, last 0.04% stronger against the dollar at $1.3741, and advancing 0.04% on the euro as well to €1.1406.

Stock markets are showing modest gains this afternoon as dealers are hopeful the Biden administration will sign off on the $1.9trn relief package as a way of stimulating the US economy, said CMC Markets analyst David Madden.

At the back end of last week it was revealed that Democratic politicians set in motion a plan to implement the proposed $1.9trn spending plan without support from Republicans, he said.

Madden said that in recent weeks there had been back and forth between Democrats and Republicans in relation to the scale of the stimulus package, but the decision was made to press ahead and try to get it approved without backing from the opposition.

Janet Yellen, the US Treasury secretary, predicts the $1.9trn spending programme will bring about full employment by the end of 2022, he said.

In equity markets, miners shone, with Anglo American up 3.9%, Antofagasta ahead 3.41%, BHP advancing 2.37%, and Glencore 2.24% firmer.

Energy producer Drax gained 0.98% after saying it was buying Canadian firm Pinnacle Renewable Energy for CAD 11.30 a share, valuing it at £226m.

Rolls-Royce was 0.96% lower on news it is temporarily closing its jet engine factories for two weeks this summer as it moves to save cash amid the coronavirus pandemic.

Experian was in the red by 0.64% after the credit-checking firm said it is carrying out a forensic investigation following media reports of a data breach involving its Serasa business in Brazil, but that there is no evidence its technology systems have been compromised.

Online supermarket Ocado was down 2.21% and online electrical goods retailer AO World lost 5.82% following a report the UK government is considering a tax raid on companies that have profited from the pandemic.

This may raise a question about opportunistic tax policy – the government is meant to be pro-business – however most people feel online retailers are not paying their fair share and the burden is falling too much on struggling high street stores, said chief market analyst Neil Wilson.

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