Health stocks got a shot in the arm as investors flocked to safe bets amid uncertainty over the outcome of the US presidential election.
Money also poured into tech, helping to lift markets despite Donald Trump and Joe Biden both expressing confidence that they would emerge victorious after polling closed across the Atlantic. London stocks slipped as trading opened before mounting a recovery. The momentum in British markets was supported by a fall in the pound, which traded at more than $1.31 but gave up its gains and sank below $1.30 in the afternoon.
The FTSE 100 closed 1.7pc higher at 5,883 points, while the mid-cap FTSE 250 index enjoyed a similar 1.7pc gain.
AstraZeneca led the blue-chip risers, adding 6.9pc before today’s trading update. Kate Bingham, the head of the UK’s Covid vaccine taskforce, said she expected the firm to deliver 4m doses of vaccine by the end of the year – just a fraction of the 100m that have been ordered.
Investors flocking to defensive sectors helped to lift Astra’s fellow drugmaker GlaxoSmithKline 4.4pc to 1,415p, while Smith and Nephew, the Watford-based medical equipment manufacturer, jumped 4.2pc.
Technology stocks were also buoyed, including computer anti-virus specialist Avast, which rose 6.3pc to 500p. Other tech risers included software manufacturer Aveva, which rose 4.2pc to 4,417p, and credit checking agency Experian, which put on 4.1pc to close at 3,038p.
Among the mid-caps, Royal Mail delivered strong gains as analysts predicted a surge in trading over the next 18 months.
The pandemic has led to increased demand for parcel delivery services as online shopping booms.
Analysts at JP Morgan upgraded Royal Mail, saying they see a “potential strong improvement in trading over the next 18 months, due in part to an improved revenue outlook”. The company added 8pc to lead the mid-cap risers.
Standard Chartered was the biggest faller among the London blue-chips as analysts speculated that investors were selling off shares to lock in gains in recent days. The bank’s shares fell 4.7pc to 354.9p.
HSBC, Barclays, Lloyds Banking Group and RBS owner NatWest were all among the FTSE 100’s top seven fallers, as investors retreated from the cyclical banking sector.
The gains in London’s main indices were mirrored across Europe, where the French Cac 40 climbed 2.4pc and Germany’s Dax 30 rose 2pc, as the counting of votes continued in the US presidential election.
“It appears that once again, investors are buying into a Joe Biden presidency, despite the race – which could still have days left in it yet – being on a knife-edge,” SpreadEx analyst Connor Campbell said.
Investors took heart from the Democrats’ fading prospects of taking control of the Senate, as a Republican majority would be likely to block any reversal of Mr Trump’s tax cuts should Mr Biden become the 46th US president.