FTSE 100 up as AstraZeneca, GSK climb on vaccine hopes
LONDON, May 29 ― UK shares ended higher yesterday, helped by drugmakers AstraZeneca and GSK as markets looked for more progress in the development of a Covid-19 vaccine, while optimism over the reopening of the economy persisted.
The blue-chip FTSE 100 rose another 1.2 per cent after ending Wednesday at an 11-week high, with AstraZeneca the biggest boost.
The group, which is developing a leading coronavirus vaccine with Oxford University, said it may have to consider introducing vaccine trial participants to the virus.
GSK was the second biggest boost to the index as it laid out plans to produce 1 billion doses of vaccine efficacy boosters for Covid-19 shots next year.
While markets are looking forward to the ending of virus-driven lockdowns, a vaccine would cement a return to economic normalcy by negating the need for disruptive social distancing.
The mid-cap FTSE 250 closed 1.1 per cent higher, gaining for the ninth session in a row as British employers turned slightly less pessimistic about hiring.
Cinema operator Cineworld was among the best performers on the mid-cap index as it planned to reopen all its cinemas in July. It also secured an additional US$110 million from lenders and a waiver on loan covenants.
“Investors are not positioning their trades based on the expected next two or three quarters' earnings,” said FXTM market strategist Hussein Sayed. “They are looking well beyond that.”
“What seems to be priced in is the economy will recover much faster than previously estimated, the pandemic will soon end and life will return to normal.”
Rebounding from a sharp coronavirus-led selloff in March, UK stocks are on course for their biggest two-month gain since the global financial crisis despite brewing US-China tensions and forecasts of a deep global recession.
Bank of England Governor Andrew Bailey said on Wednesday the economy was at risk of a longer-than-expected recovery, but hopes of even more stimulus have kept financial markets optimistic. ― Reuters