LONDON: British shares rose on Thursday after the Bank of England Governor said he thought a post-Brexit trade deal was possible and hinted at additional stimulus as rising numbers of coronavirus cases lead to fresh restrictions.
Bank of England Governor Andrew Bailey said on Thursday that risks to Britain's economy were "very much on the downside" and that the central bank was ready to use its policy firepower to limit the impact of a second wave of Covid-19 cases.
The blue-chip index rose 0.5% to close near a one-month high with oil stocks leading gains as crude prices jumped on hopes of some US coronavirus relief aid. The Governor also said that Britain and the European Union should be able to reach a trade deal.
The mid-cap index, considered a barometer for Brexit sentiment, rose to a two-month high and closed up 0.8%. In an earnings-heavy day, Ladbrokes and bwin owner GVC Holdings pared early gains to close up 0.7% at a two-year high after it raised its outlook for annual core earnings on the back of a 12% rise in third quarter revenue.
British tobacco company Imperial Brands fell 0.3% after forecasting its full-year net revenue would be broadly flat and in line with market estimates. Fund supermarket Hargreaves Lansdown dropped 4.7% after warning of weakening investor sentiment arising from Covid-19 and Brexit uncertainties.
"With hopes of some support from the US and with the pound going up, it has given the market an idea of some positive developments on the Brexit front, which also helped mid-caps gain as they are better geared towards Brexit news," said Chris Bailey, a strategist at Raymond James.
Gains were capped, however, by a government minister saying additional local Covid-19 restrictions for parts of northern England were being considered as the second wave of the novel coronavirus accelerates.
Comments
Comments are closed for this article.