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The London stock market has risen sharply on the first trading day of 2021 amid hopes that the newly approved Oxford coronavirus vaccine will lead to a faster-than-expected economic recovery from the pandemic.
The FTSE 100 leapt by almost 3% on Monday morning, gaining by more than 150 points to reach 6,638, after the vaccine developed by the University of Oxford and AstraZeneca was administered for the first time since its approval by the British medicines regulator last week.
Shares in Entain, the owner of the Ladbrokes and Coral betting brands, rose by 27% in early trading, the biggest riser on the blue-chip index, after the company rejected an £8bn takeover bid, saying it significantly undervalued the business.
Stock markets across Europe rallied as investors bet that a swift economic recovery will follow tougher government restrictions to contain rapid growth in Covid-19 infections. France’s Cac 40 index was up 1.7% and Germany’s Dax 30 rose 1.2%.
Analysts said a lack of widespread disruption for cross-border trade after the end of the Brexit transition had also buoyed markets. Truck movements are, however, below normal for the time of year, after firms rushed to move goods before the transition expired and a last-minute deal was agreed between the UK and the EU before the 31 December deadline.
Tougher government restrictions and rapid growth in coronavirus infections are however expected to hit the economy at the start of the year.
Hinesh Patel, a portfolio manager at the investment firm Quilter Investors, said the stock market gains were a reflection of investors desperately hoping that the vaccine could be rolled out quickly. “Otherwise they may find themselves prematurely embracing the reopening of the economy.”
However, he added: “With Brexit risk appearing as if it is off the table and the start of the Oxford University/AstraZeneca vaccine rollout, many investors are taking the opportunity to catch up on some of the potential opportunities they may have missed prior to Christmas.”
Source: The Guardian
Keyword: FTSE 100 jumps as Covid vaccine prompts recovery hopes | Business