The FTSE 100 started the week higher as AstraZeneca (AZN) resumed its Covid-19 vaccination trial as markets ignored rising Brexit tensions ahead of a parliamentary vote.
The UK blue-chip index was trading flat at 6,032, having fallen back from a jump to 6,075 at the open.
Pharmaceutical giant AstraZeneca reported it would restart trials after last week’s suspension following a patient falling ill. The drug, which is being developed in conjunction with Oxford University, is one of the vaccination frontrunners and is being watched closely by the market.
Fiona Cincotta, analyst at City Index, said a vaccine was the ‘surest and quickest, and possibly the only way for the economy to recover to pre-pandemic growth levels’, as the UK instigates a ‘rule of six’ that bans gatherings of more than six people as Covid-19 infections rise and a record number of new global cases was recorded.
Positive vaccination news helped offset the simmering tensions between the UK and European Union as politicians debate the controversial internal markets bills today. The future of prime minister Boris Johnson’s bill hangs in the balance as it breaks international law in overruling already agreed principles of the UK’s divorce treaty.
The pound, which fell heavily against the dollar last week, traded 0.4% higher at $1.285 this morning.
Neil Wilson, analyst at Markets.com, said ongoing talks with the EU ‘look set to be the chief driver for sterling crosses’ but a US Federal Reserve meeting this week would also impact the dollar.
International Consolidated Airlines (IAG) jumped to the top of the FTSE 100, rising 6.5%, or 8p, to 137p. The British Airways owner last week announced a £2.5bn rights issue at more than a 50% discount and cut flights in a bid to weather the coronavirus pandemic.
The FTSE 250 index gained 0.48%, or 84 points, to 17,640, led higher by OneSavings Bank (OSB), which rose 3.4% to 303p on positive analyst notes.
Peel Hunt analyst Robert Sage increased his earnings per share estimates 15% for 2020, 37% for 2021, and 39% for 2022 for the challenger bank and said ‘based on higher levels of forecast organic capital generation we increase our target price from 264p to 290p’.