Optimism over Brexit and US stimulus buoys markets

OPTIMISM continues to course through the stock market as traders maintain the cautious belief that a trade deal between the UK and EU might finally arrive this side of 2020.

They were also buoyed by Congressional leaders in the US revealing they were nearing a long-awaited agreement on a stimulus package for the US economy and there was confidence the US Federal Reserve would offer up economic forecasts showing renewed optimism for the months ahead. The hope manifested in the FTSE 100 closing up 57.59 points, or 0.88%, at 6,570.91.

The UK economy also managed to stage a minor recovery in the first half of December, following falls in November during the English lockdown. IHS Markit/CIPS latest PMI data showed growth, particularly in the manufacturing sector, although the services industry remains firmly in negative territory.

The pound was up 0.33% against the dollar at 1.351. Against the euro it also rose slightly by 0.1% at 1.109 as markets closed for the day. The French CAC 40 closed up 0.34% and Germany’s DAX 30 had a strong 1.45% rise.

In company news, Dixons Carphone unveiled a strong set of results. Bosses revealed a 16% rise in like-for-like sales in the UK and Ireland, despite store closures during regional lockdowns. Pretax profits hit £45 million for the six months to October 31 helping shares to close up 13.4p at 122p.

Fashion retailer Superdry said founder Julian Dunkerton has been appointed as permanent chief executive following his return to the top job last year after a boardroom coup. Mr Dunkerton had held the role on an interim basis since retaking control of the business after clashing with previous executives, and his contract was due to end on April 2. Shareholders reacted positively, with shares closing up 23p at 263.2p.

British American Tobacco (BAT) said it is to launch human trials for its own Covid-19 vaccine after getting regulatory approval. Shares rose 22p to 2,860p.

The biggest risers on the FTSE 100 were Barratt Developments up 28.8p at 650p; M&G up 8.25p at 198.8p; JD Sports up 30.4p at 845p; Hargreaves Lansdown up 53p at 1,501.5p and Segro up 32p at 940p.

The biggest fallers were Bunzl down 91p at 2,385p; Standard Chartered down 9.3p at 470.5p; Compass Group down 21.5p at 1,414.5p; HSBC down 5.65p at 397p and Smurfit Kappa down 46p at 3,434p.