London stocks track Asia rally as focus turns to earnings By Reuters

© Reuters. FILE PHOTO: Construction on the Greenwich Peninsula is in front of the Canary Wharf financial district in London

By Shashank Nayar

(Reuters) – UK equities rose 1% on Monday as investors focused on a stimulating economic recovery. The focus was also on the quarterly earnings season in the US and Europe to show signs of activity picking up after the coronavirus locks were relaxed.

The blue-chip FTSE 100 () rose 1.3%, with less than 10 stocks in the red in early trading, while the mid-cap FTSE 250 () gained 1.0%, led by auto ( ), Personal Goods () and Mining () sectors.

Asian stocks also started the week optimistically, heading towards the five-month peak, although some U.S. states reported new COVID-19 record cases.

"July and August are generally weaker months for the markets, but this time they are driven further by liquidity infusions, optimistic corporate earnings updates and positive news about the COVID-19 vaccine," said Keith Temperton, an analyst at Lombard Forte.

The FTSE 100 recovered from its lows of around 26% in March due to a series of monetary and fiscal incentives, but struggled to build on a three-month winning streak in July as the relentless spread of the coronavirus raised fears of another round of locks that further harm the global economy.

Rating agency Moody & # 39; s warned on Friday that the UK will experience the sharpest economic slump in all major economies this year, while the health crisis will increase public debt as a percentage of GDP by almost a quarter.

The Brexit negotiations are also back in focus, and the UK is calling on businesses and individuals to prepare for the end of the transition period on December 31. Cabinet Minister Michael Gove said on Sunday that progress had been made in the talks, but divisions still persisted.

In thin corporate news, Primark owner AB Foods (L 🙂 was almost flat as the fashion retailer said he would not use a UK government system to pay employers to return employees from vacation and a bonus of avoid around £ 30m (£ 30.03m).

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