London markets extend gains as vaccine hopes overshadow record redundancies

The London markets extended their gains on Tuesday as traders continued to bank on an accelerated recovery due to Pfizer’s coronavirus vaccine, shrugging off record redundancies.

The Office for National Statistics (ONS) recorded 314,000 redundancies in the three months to September, but it was not enough to quell the optimism which drove a major rally in equities on Monday.

Airlines, hospitality and transport stocks all had another strong showing, while progress over the EU’s budget talks also helped the markets.

The FTSE 100 closed 110.56 points higher at 6,296.85 at the end of trading on Tuesday.

Connor Campbell, financial analyst at Spreadex, said: “It took a while for the day to heat up, but yesterday’s Pfizer vaccine headlines were just so good that the markets couldn’t help but indulge in another round of gains.

“The FTSE was among the indices leading the charge.

“Rising 1.7%, it hit levels last seen at the end of July, as investors rushed into those sectors that have been most hit by the pandemic, scrabbling around in the search for value.”

Chemical giant Croda, which will supply an ingredient involved in the vaccine’s production, and aerospace engineer Rolls-Royce, were two of the day’s top performers, as they rode the wave of rebounding sentiment.

In mainland Europe, the other large markets also closed in the black although German traders were less jubilant after the country’s economic sentiment suffered a worse-than-forecast drop-off month on month.

The German Dax increased by 0.51%, while the French Cac moved 1.55% higher.

Across the Atlantic, the Dow Jones failed to indulge in the kinds of growth managed by the FTSE and CAC, as it nudged higher amid continued post-election caution.

Meanwhile, sterling made ground against the dollar and euro as traders chose to focus on reduced jobless claims in October rather than the surge in redundancies reported over the previous three months.

The pound rose by 0.61% versus the US dollar at 1.324 but was up 0.62% against the euro at 1.121.

In company news, Persimmon shares were in the red despite the housebuilding giant saying it is “well prepared” for the latest lockdown, and announced its second dividend payout thanks to resilient demand for new homes.

The Charles Church builder said it saw a strong performance in the third quarter, with average weekly sales rates up 38% on 2019. It finished the day down 108p at 2,682p.

Codemasters saw shares slip after it agreed its £759 million sale to Grand Theft Auto-owner Take-Two.

It closed 25p lower at 453p after confirming the move, which it expects will complete next year.

Lloyds Banking Group closed higher after analysts at Credit Suisse said the UK bank is well placed to improve in value compared with its European lending rivals. It closed up 1.35p at 32.13p.

The price of oil was up on the session as the part of the wider bullish move in sentiment.

The price of a barrel of Brent crude oil increased by 0.25% to 43.28 US dollars.

The FTSE 100’s biggest risers of the day were BT Group, up 13.25p at 119.2; DS Smith, up 23.4p at 323.5p; Croda, up 438p at 6,660p; and Rolls-Royce, up 7p at 107p.

The biggest fallers of the day were Scottish Mortgage Investment Trust, down 73p at 1,012p; Ocado, down 119p at 2,164p; Flutter, down 600p at 12,790p; and Persimmon, down 108p at 2,682p.