London markets bounce amid reports of progress for Covid-19 drug

The London markets closed in the green on the back of cautious optimism among traders amid hopes of progress for a Covid-19 treatment.

A warning from ratings agency Moody’s that the UK economy is heading for a 10.1% contraction in 2020 – a situation more severe than any other G20 nation – was still not enough to knock the wave of positivity.

The FTSE 100 closed 45.79 points higher at 6,095.41p at the end of trading on Friday.

David Madden, market analyst at CMC Markets UK, said: “Sentiment has been buoyed by hopes for a Covid-19 treatment.

“A study has found that Remdesivir, an anti-viral drug, can reduce the fatality rate in patients by 62%.

“This week the headlines were dominated by stories of record cases in various US states, and policymakers re-imposing lockdown restrictions, so the Remdesivir story has been a nice change of pace.”

The major European markets performed similarly well after a buoyant start to trading on Friday morning, before stabilising later in the session.

The German Dax increased by 1.15%, while the French Cac moved 1.01% higher.

Across the Atlantic, the Dow Jones opened higher despite the latest 60,000-plus daily Covid-19 case number in the US as traders welcomed news the positive signs regarding Remdesivir’s performance in treating the virus.

Meanwhile, sterling floated higher ahead of UK-EU negotiations next week, as the currency benefited from a dearth in major economic announcements.

The value of the pound rose 0.27% versus the US dollar at 1.264 and was up 0.05% against the euro at 1.117.

Hospitality firms had a strong showing as companies continued to reopen sites, with bar owner Mitchells and Butlers and hotel owner PPHE both jumping towards high in the FTSE 250.

In company news, The Gym Group edged higher after it told investors it lost around one in five of its members during lockdown, even though it froze their payments. Shares moved 0.4p higher to 150.2p.

Elsewhere, Wagamama-owner The Restaurant Group slipped after it said that one in 10 of its sites will not reopen before the end of the year. Shares closed 1.2p lower at 52.3p at the close of play.

Royal Mail saw shares improve despite being hit with a £1.5 million fine by the communications regulator for failing to deliver first-class mail on time.

Ofcom said that Royal Mail missed its target to deliver at least 93% of first-class post across the UK within one working day of it being collected. Shares closed 1.8p higher at 167.1p.

Boohoo shares tumbled again after Aberdeen Standard Investments, one of the retailer’s largest investors, cut its stake by more than half in response to accusations of poor working conditions. It closed 6.6p lower at 279.5p.

The price of oil recouped some of Thursday’s losses as positive sentiment among equity traders seeped into the energy market.

The price of a barrel of Brent crude oil increased by 1.34 to 42.97 US dollars.

The biggest risers on the FTSE 100 were Barclays, up 5.8p at 117.76p, Whitbread, up 104p at 2,268p, Homeserve, up 55p at 1,306p, and Rolls-Royce, up 10.4p at 266.7p.

The biggest fallers of the day were Hikma, down 37p at 2,105p, Burberry, down 26p at 1,550p, ABF, down 30p at 1,945p, and BAT, down 42p at 2,878p.