Global markets bounce higher as economists predict vaccine reprieve

Global markets rebounded on Tuesday as economists placed their hopes on recent positive developments surrounding effective Covid-19 vaccines.

The Organisation for Economic Co-operation and Development (OECD) said progress with treatments had “lifted expectations” and muted uncertainty.

Traders welcomed the message as stocks lifted in London.

The FTSE 100 closed 118.54 points higher at 6,384.73 at the end of trading on Tuesday.

David Madden, market analyst at CMC Markets UK, said: “Tuesday’s positive move in the FTSE 100 is largely a complete reversal of Monday’s negative move.

“Hopes continues to circulate in regards to vaccines being developed for Covid-19. The OECD now predicts that global GDP will contract by 4.2% this year which is an improvement on the previous forecast of -4.5%.

“The bullish sentiment is seen across the board as hospitality, transport, travel and property stocks are higher too.”

Elsewhere in Europe, trading sentiment was also buoyant as French stocks bounced on Emmanuel Macron’s plan for a widespread Covid-19 vaccination campaign in France between April and June.

The German Dax was 0.27% higher while the French Cac moved 1.14% higher.

Across the Atlantic, the Dow Jones moved almost 400 points higher after the bell to sit within a whisker of its all-time peak.

Meanwhile, sterling continued to make gains against a weak US dollar although it lost ground against the euro as Brexit talks intensified.

The pound rose by 0.53% versus the US dollar at 1.339 and was 0.41% down against the euro at 1.112.

A raft of retail stocks were buoyed by the administration of Topshop owner Arcadia Group and the imminent liquidation of Debenhams.

Marks & Spencer, one of Debenhams key rivals, saw shares jump after the 242-year-old department store chain said it plans to close all its stores for good. M&S closed 7p higher at 132.75p.

Fashion chains including Next, Joules and JD Sports, which pulled out of a potential rescue deal for Debenhams on Monday, all made strong gains.

In company news, FTSE 100 sugar giant Tate & Lyle made gains after it snapped up stevia-producer Sweet Green Fields.

It rose by 16p to 653.8p at the close of play on Tuesday.

Topps Tiles edged into the green despite slumping to an annual loss as it cheered rebounding sales thanks to a boom in DIY activity.

It closed 0.4p higher at 56.4p after it said like-for-like sales jumped 16.5% in its final quarter.

Elsewhere, food-to-go supplier Greencore, which is one of the UK’s biggest producers of Scotch eggs, saw shares jump after Cabinet minister Michael Gove said they would count as a “substantial meal” in a Tier 2 hospitality venue.

Shares closed 6.9p higher at 124p.

The price of oil nudged lower as OPEC+ failed to reach an agreement with regards to future production plans.

The price of a barrel of Brent crude oil decreased by 0.25% to 47.54 US dollars.

The biggest risers on the FTSE 100 were Taylor Wimpey, up 12.1p at 166.05p, Melrose, up 11.9p at 165.4p, Lloyds, up 2.65p at 38.27p, and Persimmon, up 183p at 2,839p.

The biggest fallers on the FTSE 100 were Aveva Group, down 21p at 3,181p, Hikma, down 127p at 2,481p, Avast, down 22.8p at 485.2p, and Unilever, down 137p at 4,434p.