By Barbara Kollmeyer, MarketWatch
U.K. stocks shook off early losses Monday to turn sharply higher, with investors pinning gains to hopes for possible fiscal stimulus to help an economy pounded by the COVID-19 pandemic. The commodity-weighted index also was supported by an advance in shares of BP PLC after the energy giant announced plans to sell its petrochemicals unit.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -1.03% rose 1.3% to 6,239.25, while the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1534% skidded 0.5% against the buck, changing hands at $1.2273, at last check Monday. A weaker pound can help fuel buying in equities because it can translate into increased sales for companies doing business outside of the U.K.
Shares of BP /zigman2/quotes/207305210/composite BP -1.30% /zigman2/quotes/202286639/delayed UK:BP -2.64% surged 2.6% after the energy giant said it has agreed to sell its global petrochemicals business to chemical producer INEOS for $5 billion.
U.K. Prime Minister Boris Johnson pledged to spend tens billions of pounds to salvage the economy, building hospitals, schools, housing developments and “shovel-ready” road and rail projects, he said in an interview with The Mail on Sunday. He’s expected to lay out the details in a major speech on Tuesday.
Johnson says that he will be “doubling down” on his pledge to “level up” wealth distribution across the country. “If Covid was a lightning flash, we’re about to have the thunderclap of the economic consequences. We’re going to be ready,” he said, in the interview.
Shares of TUI /zigman2/quotes/206714402/delayed DE:TUI1 -2.83% jumped 5% after the travel company said over the weekend that the U.K. and Ireland unit had seen a 50% week-on-week increase in bookings, as British holiday makers got ready for a lifting of travel lockdowns. TUI outlined its plans to restart travel operations this summer, with flights to Ibiza and Palma starting on July 11, the company said.