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Passengers wearing face masks or covering due to the COVID-19 pandemic, queue at a British Airways check-in desk at Heathrow airport, west London, on July 10, 2020.
daniel leal-olivas/Agence France-Presse/Getty Images
London stocks tracked a global rally on Wednesday, driven by optimism over potential coronavirus vaccines, with travel-related stocks leading the gains, along with drugmakers.
The FTSE 100 index UKX, +2.26% climbed 1.7%, up 3.2% for the week so far, with the British pound GBPUSD, +0.55% climbing 0.7% to $1.2642.
After the close of U.S. markets on Tuesday, biotech group ModernaMRNA said its coronavirus vaccine candidate produced a “robust” immune-system response in a larger group of people and the study will move to a decisive clinical trial in July.
In addition, investors may Thursday get positive news on initial trials of the Oxford Covid-19 vaccine that is backed by AstraZeneca AZN, +3.85%AZN, +3.73%, according to a report from U.K. television broadcaster ITV. Shares of heavily weighted AstraZeneca PLC jumped more than 4%.
European stocks climbed and U.S. equities shot higher at the start of trading , with investors encouraged by hopes for progress on the battle against the global pandemic. The fact that parts of America have been hard hit in recent weeks have triggered concerns about the pace of any global economic recovery.
“A positive start to the second quarter results season and a signal from the Federal Reserve that it will keep financial stimulus in place helped stoke a rally on Wall Street overnight and the FTSE 100 followed in its wake on Wednesday, ” added AJ Bell investment director Russ Mould, in a note to clients.
Hopes for a COVID-19 treatment triggered gains in the travel sector, with International Consolidated Airlines IAG, +11.25%, which operates British Airways, Iberia and other airlines, surging 10%. and InterContinental Hotels Group PLC IHG, +6.04% up over 5% .
Shares of restaurants and beverage groups — Whitbread PLC WTB, +7.92% and Coca Cola HBC CCH, +4.51% — gained over 4% each.
London also got a boost from firmer oil prices, which lifted heavily weighted oil companies — BP PLC BP, +2.43% and Royal Dutch Shell Group PLC. RDSA, +1.74%
On the downside, shares of Burberry PLC BRBY, -5.20% slid over 6% after the luxury fashion group said it would cut 5% of its global workforce in a cost-saving drive after a drop in sales during the coronavirus pandemic.
