London shares end at multi-month highs on vaccine optimism, commodities rally

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

(Reuters) – Commodity heavyweights propelled London’s blue-chip index to a more than five-month closing high on Tuesday, while midcaps closed at a near nine-month high, as optimism over a coronavirus vaccine increased sentiment for Hopes for a quick economic recovery.

The commodity-heavy FTSE 100 closed 1.6% higher, with energy and mining giants BP and Rio Tinto supporting the index amid firmer oil and base metals prices.

The domestically-heavy mid-cap FTSE 250 rose 1.1% to close at its highest level since early March, with industrials the biggest boost.

Both indexes surged late in the session, tracking gains on Wall Street after President-elect Joe Biden formally confirmed the White House, ending weeks of political uncertainty in Washington.

Travel stocks rose after Britain said it would introduce a new COVID-19 “test and release” scheme on Dec. 15 to shorten the quarantine period for incoming travelers from high-risk countries.

“Investors are still looking at the long-term post-vaccination outlook and are looking at various sectors that have been hit hard over the past eight months,” said Connor Campbell, a financial analyst at Spreadex.

Cyclical stocks such as energy and banks have surged on vaccine-related cheer and hopes of a quick economic recovery, helping the FTSE 100 to rise more than 14% this month and on track for its best month on record.

Among personal movers, shares of catering company Compass Group Plc rose 2.5%, even as the company reported a 75.5% drop in annual pre-tax profit.

Shares in online electronics retailer AO World fell nearly 10% after it said it was doubling the capacity of its warehouses to deal with possible supply disruptions from Brexit.

Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Alex Richardson

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