UK stocks tailed-off late on Monday as speculation increased that Prime Minister Boris Johnson would intensify lockdown restrictions during an evening address to the nation.
That capped gains during an otherwise rampant reopening from the New Year holiday as Covid vaccine optimism pushed Brexit concerns to the margins.
At the close, the benchmark FTSE 100 had come back from earlier near-3% gains to register a 1.7% rally to 6,571.88 in the first trading session of 2021 as the UK began vaccinating the population with the new Oxford University/AstraZeneca (AZN) jab.
‘UK markets certainly seem to be welcoming in 2021 with a bang’ said Hinesh Patel, portfolio manager at Quilter Investors. ‘With Brexit risk appearing as if it is off the table and the start of the Oxford University/AstraZeneca vaccine roll out, many investors are taking the opportunity to catch up on some of the potential opportunities they may have missed prior to Christmas.’
Strong performance across major European markets, a weaker dollar and a rise in oil prices lent the blue-chip benchmark additional support, although a weak start across the pond on Wall Street acted as a brake on sentiment.
The FTSE 250 was also higher although it too lost most of the strong momentum seen earlier on Monday. The mid-cap index, seen by some as a better barometer of the UK economy, rose 0.24% to 20,537.89.
AstraZeneca rallied 1.3% to £74.22 as the drugs giant also completed the sale of commercial rights to its hypertension medications Atacand and Atacand Plus in over 70 countries to Cheplapharm.
Under the terms of the agreement, AstraZeneca has received a payment of $250 million from Cheplapharm and will receive further non-contingent payments equal to $150 million during the first half of 2021.
ENTAIN REJECTS OFFER
The big corporate story was at Ladbrokes-owner Entain (ENT). Its’ stock surged 25% to £14.20 after rejecting an £8.1 billion takeover offer of about £13.83 per share from MGM Resorts International, its partner in the US. Entain said the deal ‘significantly undervalues the company and its prospects’.
Ferguson (FERG) stayed largely flat at £88.85 after the plumbing company agreed to sell Wolseley UK, its UK-based heating and plumbing distribution business, to private equity outfit Clayton, Dubilier & Rice, for around £308 million.
Business parks operator Sirius Real Estate (SRE) lost earlier gains to nudhe just 0.1% up at 93.5p after completing the acquisition of three business parks in Germany for a total of €26 million.
QINETIQ CLIMBS ON CONTRACT WIN
Defence, cyber security, evaluation and testing company QinetiQ (QQ.) reversed 0.4% to 318.6p on news it has won a £127 million, five year contract from the UK Ministry of Defence to provide engineering services for the Typhoon combat aircraft.
Music rights investor Hipgnosis Songs Fund (SONG) nudged marginally lower at 122.5p on the acquisition of the music catalogue of influential record producer Jimmy Iovine.
Under the terms of the deal, Hipgnosis has acquired 100% of Iovine’s catalogue of worldwide producer royalties comprising 259 songs and his film production royalties for ‘8 Mile’ and ‘Get Rich or Die Tryin’.
Greetings cards, stationery and creative play products maker IG Design (IGR:AIM) lost earlier gains to fall 2.5% to 630p as investors welcomed the appointment of experienced consumer sector mover and shaker Greg Hodder as independent non-executive director.
IT services provider IDE (IDE:AIM) soared more than 250% to 2.81p after winning a new contract worth twice its market cap. The ‘significant’ £22.5 million deal over three years comes from an existing customer within its partnership channel.
