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British mid-caps end higher on hopes of potential COVID-19 vaccine

07/01/2020 | 10:31am

By Shreyashi Sanyal

London's mid-cap index ended higher on Wednesday on hopes of a potential COVID-19 vaccine, while optimism over fresh stimulus and a pickup in economic activity in the second half of the year persisted.

A COVID-19 vaccine developed by Pfizer Inc and German biotech firm BioNTech showed promise and was found to be well tolerated in early-stage human trials.

"The turning point appeared to be some vaccine news, an element of the pandemic saga that has been missing from the last couple of weeks," said Connor Campbell, a financial analyst at Spreadex.

The domestically focussed FTSE 250 was up 0.4% after closing Tuesday with its best quarter in eight years, partly on the back of historic global monetary and fiscal stimulus. The export-heavy FTSE 100, however, edged 0.1% lower at the end of a choppy session.

The FTSE 100 has rallied about 25% and the FTSE 250 about 39% since crashing to multi-year lows in March.

Bank of England chief economist Andy Haldane said on Tuesday recent signs suggested Britain was on course for a V-shaped recovery, although he warned of risks of high and persistent unemployment.

Data on Wednesday showed the downturn in euro zone manufacturing in June was not as bad as initially feared, while UK figures confirmed that manufacturing activity expanded slightly last month.

"While the PMIs are still considerably below their pre-crisis levels, they have rebounded more swiftly than they did during the financial crisis," said Gabriella Dickens, assistant economist at Capital Economics.

Upper Crust owner SSP dropped 2.6% after saying it could cut about 5,000 jobs in a proposed restructuring of its UK business.

Mall operator Hammerson jumped 6.5% as it said it had received approval for the issuance of up to 300 million pounds ($371.31 million) under the government's Covid Corporate Financing Facility (CCFF).

(Reporting by Shashank Nayar in Bengaluru; Editing by Bernard Orr, Sherry Jacob-Phillips, William Maclean)

© Reuters 2020
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