June 2, 2020 / 7:21 AM / a month ago

London stocks end at near three-month highs on recovery hopes

(Reuters) - UK shares ended at near three-month highs on Tuesday amid continued bets on government stimulus and easing lockdowns helping a swifter economic recovery from the coronavirus crisis.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

The blue-chip FTSE 100 .FTSE and the domestically-focused mid-cap FTSE 250 .FTMC each added 0.9%, with both indexes ending at their highest levels since early-March.

A report suggesting further fiscal relief for local businesses increased optimism, while investors continued to watch for the British economy gradually emerging from the coronavirus lockdown.

The FTSE 100 was propped up by resource heavyweights BP PLC (BP.L) and BHP Group (BHPB.L) as commodity prices rose on the prospect of increased demand and - in the case of oil- more OPEC production cuts. [MET/L] [O/R]

No immediate escalation in U.S.-China trade tensions also helped the global sentiment, although concerns over Hong Kong persisted. [MKTS/GLOB]

“It seems that investors are more focused on the prospect of a global economic recovery and barring any fresh and more serious tensions between the U.S. and China, they may continue to increase their risk exposures,” said Charalambos Pissouros, senior market analyst at JFD Group.

Optimism over the British government scaling back curbs on social and business activity from June has driven gains in local stocks for more than a week. Still, the immediate impact of the COVID1-19 crisis continued to show in economic readings.

Data on Tuesday showed Britain’s house prices crashed in May, but there were early signs of activity picking up.

The UK travel index .FTNMX5750 rose nearly 2% as a report said the government was aiming to replace coronavirus quarantine for people arriving at airports by the end of June, with so-called air bridges being considered an option.

EasyJet (EZJ.L) rose 2.6%, while cruise operator Carnival (CCL.L) fell 1%, with both stocks likely to lose their place in the FTSE 100 after the COVID-19 crisis knocked the value of their shares to below the index’s required threshold.

Greeting card retailer Card Factory (CARDC.L) signalled it would reopen about 10% of its stores from June 15, but its shares slipped 9% as it warned business would suffer from social distancing.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur and Ed Osmond

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