LONDON: British stocks rose on Tuesday after drugmaker AstraZeneca denied reports that its COVID-19 vaccine was less effective in the elderly population, while Indivior surged after its former parent withdrew a $1.4 billion legal claim.
The blue-chip FTSE 100 index climbed 0.5%, with healthcare stocks leading the gains, while the domestically focussed mid-cap index added 0.2%.
However, limiting gains was a jump in Britain’s unemployment rate to 5.0%, the highest since 2016, as the COVID-19 pandemic continued to take its toll on the economy.
Drugmaker AstraZeneca gained 0.5% and was one of the top boosts to the blue-chip index after denying reports that its COVID-19 vaccine was not very effective for people over 65.
Britain’s Rolls-Royce tumbled 11.3% to the bottom of the FTSE 100 after it downgraded expectations for how much its engines would fly this year and warned of a big cash outflow, blaming extra travel restrictions to stop the spread of a new COVID-19 variant.
Indivior jumped 13.2% to the top of the FTSE 250 index after it said late on Monday that former parent Reckitt Benckiser would withdraw a $1.4 billion claim against the company.
“Even though the unemployment rate is at 5%, it was meant to go to 5.1%. So, there were positive angles to pick among the negative news and I think that seems to have benefited sentiment alongside pound falling,” said Connor Campbell, a financial analyst at SpreadEx.
The pound fell 0.3% against the dollar to a one-week low, supporting the exporter-heavy FTSE 100 index.
German media reports said officials fear the vaccine may not be approved in the European Union for use in the elderly population.
The FTSE 100 has recorded consistent monthly gains since November on hopes of a vaccine-led recovery, but it has recently lost steam as extended lockdowns hit business activity.