Recovery hopes power UK stocks; Cineworld soars

(Reuters) – UK shares rose on Thursday as early signs of a pickup in business sentiment fuelled hopes of a post-coronavirus economic rebound, while Cineworld surged 22% on a plan to reopen all its cinemas in July.

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 cinema operator (CINE.L) tracked its best day in more than a month as it also secured an additional $110 million from lenders and a waiver on loan covenants.

The blue-chip FTSE 100 .FTSE climbed another 0.7% after ending Wednesday at an 11-week high.

The mid-cap FTSE 250 .FTMC added 1.1%, gaining for the ninth session in a row as British employers turned slightly less pessimistic about hiring following moves to reopen the economy.

“Investors are not positioning their trades based on the expected next two or three quarters’ earnings, they are looking well beyond that,” said Hussein Sayed, market strategist at FXTM.

“What seems to be priced in is the economy will recover much faster than previously estimated, the pandemic will soon end and life will return to normal.”

Rebounding from a sharp coronavirus-led selloff in March, UK stocks are on course for their biggest two-month gain since the global financial crisis despite brewing U.S.-China tensions and forecasts of a deep global recession.

Bank of England Governor Andrew Bailey said on Wednesday the economy was at risk of a longer-than-expected recovery, but hopes of even more stimulus have kept financial markets optimistic.

Low-cost airline easyJet Plc (EZJ.L) jumped 7.7% to the top of the FTSE 100 as it said it would cut up to 30% of its staff and shrink its fleet following a collapse in global air travel.

The pharmaceuticals index .FTNMX4570 gained 1.7%, powered by a 2.7% rise for AstraZeneca Plc (AZN.L) after it said it was testing one of its diabetes drugs as a treatment for COVID-19 despite a warning by doctors on potentially dangerous side effects.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta

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