European markets retreat from day highs as Prime Minister set to address the country
The first patients started being inoculated with the vaccine developed by AstraZeneca and Oxford University on Monday.
Updates first 5 pars and par 10 at market close
London’s top market retreated from what had been its highest point in nine months on Monday.
The FTSE 100 gained more than 200 points in its first hours of trading after the Brexit transition period ended. However, analysts said that a falling pound would suggest that the FTSE’s strong morning had little to do with Brexit.
The more than 3% rise was followed by increases of 1.9% and 1.3% in the French and German main indexes. However by the end of the day all three had given back much of those gains.
The FTSE closed up 1.7%, while in France and Germany the gains paired back to 0.7% and 0.1% respectively.
The early rises were likely responses to the news that the NHS is starting to roll out the new vaccine against Covid-19 which has been developed by scientists at Oxford University and AstraZeneca.
“Despite the rapid increase in daily Covid-19 case numbers and the impending need for a new national lockdown – be it immediately, as urged by Keir Starmer, or in a couple of weeks, as suggested by Boris Johnson – the FTSE was the most bombastic of the major indices after the bell,” said Connor Campbell, an analyst at Spreadex.
“These gains can be tied to the rollout of the Oxford/AstraZeneca vaccine in the UK – the continuation of 2021’s great hope for ending the coronavirus pandemic. It is another step on the journey back to normality, and investors have seized upon it with all their might.”
He added that a 0.4% drop in the pound against the euro, while remaining flat against the dollar, would indicate that the FTSE’s gains are not significantly tied to Brexit.
Neil Wilson, a Markets.com analyst, said that UK firms are benefiting by a liberalisation of the US gaming market.
“We should also note that good global businesses trading with a UK-listed discount to the share price remain attractive to foreign groups hungry for growth. Clarity around Brexit at long last may see more bids of this nature emerge,” he added.
Traders will be looking ahead to two vitally important US senate races in Georgia on Tuesday. The state, which voted for Joe Biden for president, is set to elect two senators, and could hand control of the chamber to the Democrats.
A win for the democratic candidates would allow Mr Biden much greater freedom in pursuing his own legislation over the next two years, while a loss could give Republicans a chance to block many of his political appointments.
