UK shares made solid gains on Tuesday as investors turned their attention to vaccine-led economic recovery optimism.
Britain was given a boost as Prime Minister Boris Johnson said on Monday that the economy was on track for the gradual re-opening set out in the government’s road-map.
Sentiment in this regard was further bolstered by news the UK had secured a deal for 60 million new Novavax jabs to be formulated and packed here in the UK, removing supply chain issues posed by the threat of an EU vaccines embargo.
After rallying more than 0.7% in the morning, the UK’s benchmark FTSE 100 index gained 0.3% by lunchtime to 6,756.45, while the mid-cap FTSE 250 added 0.41% to 21,524.49.
It comes after Bank of England rate-setter Gertjan Vlieghe said Britain’s economy would still need help from the central bank to restore it to its pre-pandemic growth path, even with a fast recovery and some inflation this year.
SPECIAL DIVIDEND IN THE POST
In company news, Royal Mail (RMG) added 2% to 520p after saying it would pay a one-off dividend for the year ending March following recent upgrades to its financial outlook on the back of a surge in parcel demand during the pandemic and a recent pick-up in letter volumes.
Tobacco giant Imperial Brands (IMB) fell 1.5% to £14.89 even after maintaining its full-year adjusted profit growth forecast, as it expected "significantly reduced" losses from next generation products and increased investments in its business.
Power utility SSE (SSE) dropped 1.8% to £14.29 despite having reiterated annual earnings guidance after a worse-than-expected impact from weather conditions was offset by a smaller-than-expected hit from Covid-19.
SSE reaffirmed its guidance for adjusted earnings per share in the year through March of between 85p and 90p.
Water utility Pennon (PNN) fell back 3.3% to 960.3p on announcing it was continuing to narrow down potential investment opportunities, having recently reaped £3.7 billion from the sale of Viridor.
Pennon reiterated that it may return a substantial amount of capital to shareholders, should it not find an attractive investment target.
Property stocks were well bid with retail sector specialist Hammerson (HMSO), which part-owns London’s Brent Cross shopping centre along with a bunch of other malls, up 5.3% at 35.2p.
Student accommodation developer Unite (UTG) firmed 1% to £10.80 after it sold a portfolio of eight properties for £133 million to Aventicum Real Estate.
The disposal portfolio, comprising 2,284 beds included assets in Coventry, Wolverhampton, Birmingham, Exeter and Manchester.
AIM-listed conferencing platform LoopUp (LOOP:AIM) jumped 23.4% to 90p after reporting on its topsy-turvy 2020.
The company posted a stonking 239% jump in earnings before interest, tax, depreciation and amortisation to £15.3 million on revenues up 18% at £50.2 million, but with a marked second half slowdown.
Secure payments and customer contact solutions firm Eckoh (ECK:AIM) rallied more than 10% to 71p after bagging a $1.35 million contract with a US healthcare operation.
Specialist brick manufacturer Michelmersh Brick (MBH:AIM) added 4.1% to 141.6p even as it booked a 17% fall in annual profit after the Covid-19 pandemic slowed construction activity and disrupted manufacturing operations. Michelmersh Brick, however, more than doubled its dividend, citing a strong cash position.
Investment bank and broker Numis (NUM:AIM) gained 2.6% to 389.5p on guiding for a more than 75% jump in first-half revenue.
Packaging company MPAC (MPAC:AIM) fell 3.7% to 526.8p after it reported a 46% fall in annual profit as the pandemic hit sales, though it said demand rebounded in the second half.