LONDON: The FTSE 100 jumped on Monday after US health regulators authorised a Covid-19 treatment over the weekend, while AstraZeneca boosted the index on a report the US government was considering fast-tracking its experimental vaccine. The British drugmaker gained 2.1% as the report said one option being explored would involve the US health regulator awarding "emergency use authorisation" in October to the potential vaccine.
The export-laden FTSE 100 was up 1.7%, capping its best session in 12 days, while the mid-cap FTSE 250 rose 0.6%, led by financials and industrials. The blue-chip FTSE 100 has bounced from its March lows but lagged the US benchmark S&P 500, which is scaling record highs on fiscal and monetary stimulus and hopes that the worst of the pandemic's economic damage is over.
Bunzl Plc gained 2.8% after resuming dividends, while pub operator J D Wetherspoon fell 3% as its sales were still down sharply year-on-year despite the government's subsidised meal scheme and calls for tax relief for the hospitality sector to be extended. "These are typical August markets where you don't have a lot that's driving them up except the absence of bad news," said Michael Hewson, a market analyst at CMC Markets UK.
On Sunday, the US Food & Drug Administration said it authorised the use of blood plasma from patients who had recovered from Covid-19 as a treatment for the disease. "If last week was beset by the economic realities of the Covid-19 pandemic, then Monday is starting out with a (temporary) cure for those concerns," said financial analyst Connor Campbell at spreadbetters Spreadex.
The focus will turn to US Federal Reserve Chair Jerome Powell's address at the Kansas City Fed's annual conference on Thursday for any hints as to the central bank's efforts to revamp its approach to monetary policy.
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