Markets report: FTSE benefits from wave of optimism

Louise Moon
·2-min read
AstraZeneca markets
AstraZeneca markets

The FTSE 100 recorded its best month in over 30 years as a wave of US election relief and optimism over positive vaccine trials swept through global markets in November.

Though the benchmark was in a downbeat mood on Monday, shedding 1.6pc, it clocked gains of 12.4pc in November to mark its best month since rising 11.5pc in May 1990. It fell just shy of beating its best month ever in January 1989.

It has rebounded 30pc from a coronavirus-induced crash in March, though until this month had lagged behind US and European counterparts over fears about the extent of economic damage inflicted by lockdowns.

Confidence among British businesses fell to a four-month low in November as a whole, though firms turned less pessimistic after news of vaccine breakthroughs, according to a survey by Lloyds Bank.

Barclays’ equity strategists warned of a “bumpy” path ahead, but said the arrivals of several high-efficacy vaccines should bring Covid-19 under control.

AstraZeneca’s shares rose 35p to £78.05, having fallen through most of last week, after analysts at Cowen named the stock its top pharma pick on growth prospects and UBS raised its rating for the firm from sell to neutral, citing the recent decline following Covid-19 vaccine data.

The domestically-exposed FTSE 250 – also considered a barometer for Brexit sentiment – dipped 0.7pc on Monday, though rose around 12pc in its best month since the financial crisis.

Traders were seeking to cash in on gains, while Britain and the European Union warned each other that time was running out to reach a Brexit trade deal, with big differences still to be bridged on state aid, enforcement and fishing.

Among companies, Mike Ashley’s JD Sports added 43p to 776.2p to lead gains on the FTSE 100. It came after reports the retailer is backing away from talks of a buyout with Debenhams administrators amid Arcadia’s looming administration – the big news of the day.

The home furnishings retailer Dunelm was among the big risers on the FTSE 250 after Richard Chamberlain, equity analyst at the Royal Bank of Canada, said the group’s 20pc price pullback in the past month – driven by store closures and a rotation out of lockdown winners – is a strong buying opportunity for investors. It gained 36p to £12.20.

Fellow mid-cap company and troubled Russia-focused gold miner Petropavlovsk gained a slight 0.25p to 27.45p after announcing it had appointed Denis Alexandrov as its new chief executive.

Mr Alexandrov joins from his previous role as chief executive of Russian gold producer Highland Gold Mining, and replaces Dr Alya Samokhvalova, who is suing for unfair dismissal.