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(Alliance News) - Stocks in London ended mostly higher on Wednesday as investors continued to take heart from the reopening of economies around the world.
The Spanish government revealed on Monday that its requirement for overseas visitors to go into quarantine for 14 days will be lifted from July 1. This followed announcements by other popular travel destinations that coronavirus restrictions will be eased in the weeks ahead, in time for the summer holidays.
The FTSE 100 index closed up 76.49 points, or 1.3%, at 6,144.25. The FTSE 250 ended up 210.20 points, or 1.2%, at 17,143.62, but the AIM All-Share closed down 2.02 points, or 0.2%, at 852.22.
The Cboe UK 100 ended up 1.1% at 10,376.59, the Cboe UK 250 closed up 1.5% at 14,663.71, and the Cboe UK Small Companies ended up 0.3% at 9,046.27.
In Paris the CAC 40 ended up 1.8%, while the DAX 30 in Frankfurt ended up 1.3%.
"European markets have seen another solid session today, rallying for the third day in a row, over optimism over the lifting of lockdown restrictions, with airlines, travel and retail stocks all moving higher," said CMC Markets analyst Michael Hewson.
In the FTSE 100, aviation aftermarket services providers, which were battered at the height of the pandemic as investors became increasingly concerned by the impact Covid-19 would have on travel, ended in the green.
Melrose Industries, Meggitt and Rolls-Royce closed up 12%, 10% and 10% respectively.
Additionally, M&G closed up 10% after the savings and investments company said it added GBP14 billion to its assets under management by acquiring Royal London Mutual Insurance Society's platform business Ascentric. No financial details of the deal were disclosed.
M&G separately reported an 8.2% drop in total assets under management and administration mainly due to the "shock to markets in March from the disruption associated with the outbreak of Covid-19".
The firm, which was spun off from Prudential last year, said its total assets under management and administration declined 8.2% to GBP323 billion at March 31 from GBP352 billion at the end of 2019 due to the coronavirus disruption, but that the company's solvency ratio remained comfortably above its risk appetite throughout the crisis.
M&G confirmed its intention to pay on Friday dividends of GBP410 million, comprising an ordinary dividend of 11.92 pence per share and a special demerger dividend of 3.85p per share.
St James's Place closed up 8.3% after the wealth manager said April gross inflows were "robust", though they did come in lower than a year ago, as its partners shifted to managing clients "virtually".
St James's Place said gross inflows for April amounted to GBP1.17 billion versus GBP1.35 billion a year ago, with net inflows broadly flat at GBP810 million. Closing funds under management totalled GBP108.83 billion, up 1.5% from 107.19 billion.
For the four months to April, gross inflows were GBP5.21 billion, up from GBP4.96 billion a year before, and net inflows were up to GBP3.18 billion from GBP2.98 billion.
The pound was quoted at USD1.2217 at the London equities close, down sharply from USD1.2346 at the close Tuesday, after hopes of a breakthrough in the latest round of Brexit talks were stifled.
The UK took a "firm" stance that it will not extend the Brexit transition period beyond the end of the year, the UK's chief negotiator with Brussels has told members of Parliament.
David Frost, the UK's chief Brexit negotiator, insisted that Britain is taking the stance to avoid more "significant" payments to the EU.
Speaking to the Commons Committee on the future relationship with the EU, Frost said: "That is the firm policy of the government that we will not extend [the] transition period and, if asked, we would not agree to it."
Earlier on Wednesday, Michel Barnier, the EU's chief negotiator, said the bloc was open to a two-year Brexit extension.
Frost confirmed that UK Prime Minister Boris Johnson will take part in top-level talks next month on the UK's future trade relationship with the EU.
"Sterling got a smack and the euro pulled back from its highs of the day as Britain's chief Brexit negotiator confirmed what we already knew; that UK-EU talks are not going very well at all. Whilst a classic last-minute EU fudge is still broadly anticipated by the market, the language from David Frost was not optimistic," said Markets.com analyst Neil Wilson.
The euro stood at USD1.0977 at the European equities close, flat from USD1.0978 late Tuesday, after the European Commission unveiled a EUR750 billion aid package to help the EU recover from the coronavirus pandemic.
It will borrow these funds and then disburse them via the European budget - the EU's common basket of cash that supports programs such as Erasmus. They will be repaid between 2028 and 2058.
Against the yen, the dollar was trading at JPY107.80, up from JPY107.62 late Tuesday.
Japan announced fresh stimulus plans worth nearly USD300 billion on Wednesday to pep up the economy after the coronavirus pandemic tipped the country into recession.
Consumer spending has slowed to a crawl despite Japan's relatively low infection numbers and death toll from the disease outbreak, prompting the first economic downturn since 2015.
In response, Prime Minister Shinzo Abe's cabinet agreed to a second exceptional budget of JPY31.91 trillion, including subsidies for smaller businesses and cash handouts for medical workers.
Stocks in New York were mostly lower at the London equities close after China's Foreign Ministry said Beijing would strike back at the US if it took any action over proposed security laws in Hong Kong.
The DJIA was up 0.6%, but the S&P 500 index was down 0.3% and the Nasdaq Composite was down 1.8%.
US Congress was set Wednesday to authorise sanctions against Chinese officials over the mass incarceration of Uighur Muslims, ramping up pressure in another front in the Pacific powers' troubled relationship.
The US House of Representatives will vote later Wednesday on a final version of the Uighur Human Rights Act, which unanimously passed the Senate and has infuriated China.
The expected passage comes just as the US is looking to sway China on another rights issue - Hong Kong, where Beijing is due to impose a security law that critics say will drastically curb free expression in the semi-autonomous territory.
"The afternoon session saw some tempering of today's enthusiasm on a report from the South China Morning Post that said China was ready to hit back on the US over any punitive action with regard to Hong Kong. Until then markets had been content to ignore the risks of the rising tension between the two over the implementation of a new security law, and the prospect of the US implementing economic sanctions against key Chinese officials," said CMC's Hewson.
Brent oil was quoted at USD34.43 a barrel at the equities close, slightly lower from USD34.72 at the close Tuesday.
Gold was quoted at USD1,701.04 an ounce at the London equities close, down from USD1,713.19 late Tuesday.
The economic events calendar on Thursday has Germany inflation figures at 1300 BST and US GDP readings at 1330 BST.
The UK corporate calendar on Thursday has interim results from newspaper publisher Daily Mail & General Trust and first-quarter results from office provider IWG.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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