June 3, 2020 / 7:16 AM / a month ago

London stocks surge as recovery optimism buoyed by robust data

(Reuters) - UK shares closed at three-month highs on Wednesday as better-than-expected data from the world’s two largest economies pointed to an ongoing economic recovery from the coronavirus.

FILE PHOTO: The London Stock Exchange Group building in the City of London financial district, Britain, March 9, 2020. REUTERS/Toby Melville/File Photo

The blue-chip FTSE 100 .FTSE and the mid-cap FTSE 250 .FTMC both added about 2.6% as readings showed business activity in the United States and China beginning to recover from the worst readings of the COVID-19 pandemic.

The data fed optimism over the UK economy grinding back into gear, as the government scales back virus-related lockdown measures.

“The economy’s slowly coming back into production. It seems like we may have a much quicker recovery than what was anticipated before,” said Michael Baker, analyst at ETX Capital.

“We’re breaking key levels, and we’re still a little bit further and farther off from where we were, pre-pandemic. There’s aggressive buying on the high.”

For a graphic on British Bluechips and the Coronavirus:

here

UK stock markets have rebounded sharply from March’s coronavirus-driven crash, with optimism about easing stay-at-home orders and more global stimulus offsetting concerns about U.S.-China tensions and growing civil unrest in the United States.

The FTSE 100 is now about 17% below its January record high, with battered autos .FTNMX3350, real estate .FTUB8600 and travel stocks .FTNMX5750 driving the rebound since April.

HSBC (HSBA.L) was the biggest boost to the blue chip index on Wednesday, rising more than 4% after the bank’s top executive signed a petition backing China’s imposition of a national security law on Hong Kong.

Oil and gas heavyweights Royal Dutch Shell (RDSa.L) and BP (BP.L) rose as hopes for recovering demand and likely OPEC production cuts boosted crude prices. [O/R]

TUI Group (TUIT.L), Europe’s biggest travel company, jumped 8.5% on a deal struck with U.S.-based Boeing (BA.N) for compensation and slower delivery of the 737 MAX aircraft.

Defence contractor Chemring Group (CHG.L) soared 26%, its best day in nearly eight years, as it maintained its annual targets and raised dividends after winning new orders from the United States despite the coronavirus crisis.

Reporting by Sagarika Jaisinghani and Shashank Nayar in Bengaluru; Editing by Arun Koyyur; Editing by Kirsten Donovan

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