The FTSE 100 started 2021 with strong gains on Monday as London’s leading index jumping sharply in early trade before easing off into the afternoon.
Analyst pointed to enthusiasm surrounding Brexit as reason for the jump as markets continued to position for the consequence of the UK and EU reaching a trade deal.
“The FTSE 100 is kicking off 2021 in style, with the headline UK market enjoying an impressive 3% gain in early trade. With Brexit finally here, there are precious few signs of initial difficulties allaying some of the fears over what the eventual exit could look like,” said Joshua Mahony, Senior Market Analyst at IG.
The optimism was also evident in markets across the Atlantic as US indices headed towards all time highs in their first trading session of the season.
“A lot of people that may have missed out or sold at the wrong time last year are now saying I want to get in. The coast is clear, the vaccines are coming, and they want to start to participate in the market,” said Thomas Hayes, managing member at Great Hill Capital LLC to Reuters.
FTSE 100 shrugs of higher COVID-19 cases
The FTSE 100 rose despite record UK COVID-19 cases announced over the weekend and speculation the entire UK would once again be plunged into a lockdown.
However, with vaccine rollouts on the horizon, any economic activity is likely to confined to one or two months before the global economy can resume a form of normalcy.
Ladbrokes owner, Entain, was the FTSE 100’s top riser after the group rebuffed at takeover approach from US Casino operator MGM.
MGM proposed a £8bn takeover but the bid was rejected by Entain who said it undervalued the company.
“Entain Group understandably leads the way after a rejected takeover bid from MGM Resorts highlighted the potential for a new enhanced offer in the near future,” said Joshua Mahony, Senior Market Analyst at IG.
“With the US providing the new frontier for gambling websites, it is clear that the sector could enjoy a period of substantial growth if they successfully tap into this newly-deregulated market.”