(Alliance News) -Â The FTSE 100 shot out the door on Wednesday ahead of the UK budget, with markets fueled by optimism over vaccine rollouts and the prospect of further US government stimulus.
The FTSE 100 index was up 80.52 points, or 1.2%, at 6,694.27 early Wednesday. The mid-cap FTSE 250 index was up 204.81 points, or 1.0%, at 21,382.72. The AIM All-Share index was up 0.1% at 1,190.94.
The Cboe UK 100 index was up 1.1% at 667.10. The Cboe 250 was up 1.1% as well, at 18,991.12, and the Cboe Small Companies up 0.4% at 13,384.39.
In mainland Europe, the CAC 40 in Paris was up 0.8%, while the DAX 30 in Frankfurt was 0.9% higher early Wednesday.
Naeem Aslam at AvaTrade cited optimism over US stimulus and vaccine rollouts as being behind Wednesday's move higher.
US President Joe Biden said Tuesday the country would have sufficient vaccine supply by the end of May to inoculate the US adult population.
"We're now on track to have enough vaccine supply for every adult in America by the end of May," said Biden – who last month had forecast it would take until the end of July to amass that many doses.
"That's progress. Important progress. But it is not enough to have the vaccine supply," Biden said. "We need vaccinators, people who put the shots in people's arms, millions of Americans' arms."
AvaTrade's Aslam said: "The most important economic number which is due today is the private payroll for the month of February...The fact that the coronavirus vaccination process is taking place at high speed in the US, traders are expecting this number to come in much stronger than the previous number. The forecast is for the 225K against the previous reading of 174K. Of course, a strong reading is highly like to push the dollar index."
The US ADP employment report is at 1315 GMT. Ahead of this, the dollar was mostly soft against major counterparts.
The euro traded at USD1.2079 early Wednesday, firm on USD1.2072 late Tuesday, while the pound gathered momentum ahead of the UK budget at midday, trading at USD1.3965 in the morning versus USD1.3946.
"The pound is up on expectations Rishi Sunak will announce today colossal plans to extend the furlough scheme until September, and pledge to use the 'full measure of our fiscal firepower' to save UK jobs," said Stephen Innes at Axi.
UK Chancellor Rishi Sunak is set to announce an extension of the furlough scheme to the end of September, with employers asked to contribute to workers' salaries from July. That month, employers will be expected to contribute 10%, increasing to 20% in August and September, as the economy reopens. Employees will continue to receive 80% of their salary for hours not worked until the scheme ends.
The chancellor also will announce further support for self-employed workers, with more than 600,000 people – many of whom become self-employed in 2019-20 – now eligible for cash grants.
Turning to the London Stock Exchange, in the FTSE 100, Sage rose after Goldman Sachs upgraded the accounting software firm to Neutral from Sell.
At the top of the FTSE 250 was Micro Focus, rallying 13% after signing a commercial agreement with Amazon Web Services. In connection with this, Micro Focus has issued warrants to Amazon NV Investment Holdings to subscribe for up to 15.9 million shares at 446.60 pence each.
"This important strategic agreement between Micro Focus and AWS combines our technology leadership position in Application Modernisation with the world's most comprehensive and broadly adopted cloud provider. The modernization of mainframe applications and workloads into cloud environments is increasingly becoming an imperative in the digital transformation programmes of large enterprises worldwide, and this collaboration has the potential to drive new customer adoption and growth within our Application Modernisation and Connectivity Product Group for an extended period," said Chief Executive Stephen Murdoch.
Biffa shares rose 6.0% after lifting its full-year guidance.
The waste management company said its performance in the second half has continued to be ahead of its base case expectations, with the third lockdown hitting earnings less severely than originally anticipated.
Underlying Ebit for the financial year ended March 26 is expected to be "well ahead" of the board's previous expectations, in the range of GBP42 million to GBP44 million. Biffa noted that consensus stands at GBP33.8 million.
Slumped at the bottom of the mid-caps was Hiscox, down 8.8% after swinging to a loss for 2020.
Gross premiums written were broadly flat at USD4.03 billion, with net premiums earnings rising to USD2.75 billion from USD2.64 billion. However, the firm swung to a pretax loss of USD268.5 million from a USD53.1 million profit in 2019.
Hiscox said it expects to pay USD475 million in Covid-related claims net of reinsurance, the majority for event cancellation and the remaining for business interruption and other claims.
"These are large sums and disappointingly means that we will make a pre-tax loss for the year of USD268 million. Without Covid-19 we would have produced a profit of USD207 million," the firm said.
Nonetheless, Hiscox said the challenges of the pandemic have not "withered the green shoots" of a hardening market. The company noted that rates are rising across all three of its business areas.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 0.5%. Against the yen, the dollar was quoted at JPY106.87 versus JPY106.73.
In China, the Shanghai Composite closed up 2.0%, while the Hang Seng index in Hong Kong closed up 2.7%.
Growth in China's service sector continued to slow in February, with a weaker rise in new business, and a fresh decline in new export work, data from Caixin and IHS Markit showed on Wednesday.
The headline seasonally adjusted business activity index dipped to 51.5 index points in February from 52.0 points in January, reflecting a consecutive loss in momentum since November.
Gold was quoted at USD1,733.63 an ounce early Wednesday, higher than USD1,727.95 on Tuesday. Brent oil was trading at USD63.05 a barrel, down from USD63.64 late Tuesday.
The economic calendar on Wednesday has a raft of services PMIs, including Germany at 0855 GMT, the eurozone and 0900 GMT and the UK at 0930 GMT.
By Lucy Heming;Â lucyheming@alliancenews.com
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