By Barbara Kollmeyer
News that the U.K. has granted emergency authorization for a COVID-19 vaccine lifted leisure stocks, but failed to light a fire under markets overall. The FTSE 100 got a lift, partly from a drop in the pound on Brexit headlines.
The smaller-cap FTSE 250 index /zigman2/quotes/210598417/delayed UK:MCX -1.36% still fell about 0.4%, but shares of pub groups such as Mitchells & Butlers /zigman2/quotes/209008939/delayed UK:MAB -1.30% climbed 3%, and those of cinema operator Cineworld /zigman2/quotes/206525056/delayed UK:CINE -4.56% gained 2.6%.
Drugmaker Pfizer /zigman2/quotes/202877789/composite PFE -0.98% and its partner BioNTech’s /zigman2/quotes/214419716/composite BNTX -2.94% two-shot vaccine was authorized by the U.K. medicines regulator the Medicines and Healthcare products Regulatory Agency, with inoculations expected to roll out within days for those who need it most.
“As the U.K. leaves the nationwide lockdown in favour of the tiered system today, it is now a race against time to vaccinate enough people before a third wave comes to pass next year,” said Joshua Mahony, senior market analyst at IG, in a note to clients.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -2.53% , meanwhile, gained 0.3% as sterling /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0790% dropped 0.5% against the dollar. Pound weakness works in favor of multinational companies, as it makes their goods more competitive overseas.
“The pound has been hit hard on the news that [chief European Union Brexit negotiator] Michel Barnier has notified the EU27 that a no-deal scenario is looking increasingly likely,” said Mahony.
Addressing the 27-member EU on Wednesday, Barnier reportedly said sticking points remain to reach a deal on a future trade relationship before the U.K. leaves Europe’s single market on Dec. 31. In closed-door meetings, he said sticking points remained, the Financial Times reported.
Gains for heavily-weighted mining stocks helped lift the FTSE 100, a day after copper prices /zigman2/quotes/210055581/delayed HGH21 -3.94% shot to the highest levels since March 2013 , with shares of Rio Tinto /zigman2/quotes/202627887/composite RIO -3.03% /zigman2/quotes/208934945/delayed UK:RIO -4.52% and BHP /zigman2/quotes/208108397/composite BHP -2.73% climbing 4% each.
Major oil companies also rose, with shares of BP /zigman2/quotes/207305210/composite BP -4.61% /zigman2/quotes/202286639/delayed UK:BP -4.20% up over 2% and Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA -3.33% /zigman2/quotes/205095589/composite RDS.A -2.84% rising 1.4%