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UK midcap stocks finish on a two-week high on EU stimulus

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The mid-cap FTSE 250 closed 0.7% higher at a two-week peak, tracking gains in European shares after EU leaders agreed on a stimulus package to bolster economic growth during COVID-19 pandemic

London midcap stocks tracked European markets higher on Tuesday after bumper stimulus measures from the European Union, while a slight pull-back in the healthcare sector on uncertainty over a coronavirus vaccine weighed on the blue-chip index.

The mid-cap FTSE 250 closed 0.7% higher at a two-week peak, tracking gains in European shares after EU leaders agreed on a stimulus package to bolster economic growth through the COVID-19 pandemic.

The blue-chip FTSE 100 ended up 0.1%, as gains in energy were offset by drugmaker AstraZeneca. The stock retreated from life-time highs after the lead developer of its vaccine expressed caution over when the vaccine could be rolled out.

Positive data from a series of vaccine tests had driven stocks higher on Monday. Local stocks have also been cheered by the British government’s relaxation of virus-driven curbs on activity to try to drive an eventual economic recovery.

A vaccine could provide a more durable solution to the coronavirus crisis, but we have now learned enough about the virus to say that we think policymakers are unlikely to re-impose national lockdowns to control the spread of COVID-19, UBS analysts wrote in a note.

The focus has turned to quarterly corporate earnings updates to gauge the pace of a post-pandemic business recovery.

BHP Group, the world’s largest miner, and rival Rio Tinto weighed on the FTSE 100 after the former reported higher quarterly iron ore output, but warned of a hit to demand for the material from the outbreak.

Ted Baker soared 14.4% after the struggling fashion retailer said it performed better than expected in the 11 weeks to July 18.

Ladbrokes owner GVC Plc marked its worst day since early-April after saying British tax authorities had expanded an investigation into the gambling company’s former online business in Turkey to include unidentified entities within the group.

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