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Dec. 2, 2020, 11:14 a.m. EST

Restaurants gain in London on vaccine news, but Brexit worries overshadow pound

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 (FTSE:UK:MCX) still fell about 0.4%, but shares of pub groups such as Mitchells & Butlers (LON:UK:MAB) climbed 3%, and those of cinema operator Cineworld (LON:UK:CINE) gained 2.6%.

Drugmaker Pfizer (NYS:PFE) and its partner BioNTech’s (NAS:BNTX) 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.

Read: How the U.K. became first to grant a license for the Pfizer-BioNTech vaccine

The FTSE 100 (FTSE:UK:UKX) , meanwhile, gained 0.3% as sterling (XTUP:GBPUSD) 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.

Read: Scotch-egg debate transfixes England on eve of lockdown’s end

Gains for heavily-weighted mining stocks helped lift the FTSE 100, a day after copper prices shot to the highest levels since March 2013 , with shares of Rio Tinto (NYS:RIO) (LON:UK:RIO) and BHP (NYS:BHP) climbing 4% each.

Major oil companies also rose, with shares of BP (NYS:BP) (LON:UK:BP) up over 2% and Royal Dutch Shell (LON:UK:RDSA) (NYS:RDS.A) rising 1.4%

Link to MarketWatch's Slice.