UK shares roar ahead of their continental peers as Covid-19 vaccine rollout hits its targets 

Analysts are now talking about the potential for the British economy
UK shares roar ahead of their continental peers as Covid-19 vaccine rollout hits its targets 

Peter Brown at Baggot Asset Management said countries with the fastest vaccine rollouts will be the main beneficiaries of the economic rebound. Picture: iStock

UK shares roared ahead of their continental peers after Britain said it had vaccinated over 15m people, underlining the importance of the rollouts of vaccines in boosting the worst-hit Covid-19 economies.     

Analysts are now talking about the potential for the British economy — which suffered one of the worst death tolls and one of the largest economic contractions of the wealthiest nations last year — to open up and rebound more quickly as its vaccine programme gathers pace. 

London's Ftse-100 climbed 2.5%, which compared with more modest gains across its European peers, helped by international companies, including oil majors, which have the most to gain from a world economic recovery.

Signs of a return to normality

"Investors used to seeing the index lag far behind US and European peers will be cheering on as almost the entire index moves higher," said Chris Beauchamp, senior market adviser at online broker IG.

This is a sign that the global reopening trade has no desire to slow down, emboldened by news that the UK has succeeded in giving 15 million people a first dose of the Covid vaccine.

Mr Beauchamp also pointed to the gains for global catering firm Compass, as a sign of the potential for other stocks to be tap "a general return to normality".

Peter Brown at Baggot Asset Management said that there was "no question" that countries with the fastest vaccine rollouts will be the main beneficiaries of the economic rebound, as their economies open up faster to hospitality and tourism than others. A handful of Irish shares joined in the rally.

Irish banks climb by up to 4.2%

AIB and Bank of Ireland — which are used as proxies for the Irish economy by foreign investors — climbed by up to 4.2%, while Kingspan, the building products group that sells across Europe, rose 5%.   

The number of people requiring the pandemic unemployment payment (PUP) appears to have peaked, as some construction workers go back to work before a proposed full-scale reopening of sites. 

There were 477,665 people on the PUP scheme, down 3,666 in the week. That means that the number on the PUP during the third lockdown may have already peaked, with around 116,000 fewer people on the scheme than towards the end of the first lockdown in May of last year. Some of those people may have joined the live register unemployment count.

700 fewer construction workers on PUP

At around 62,200, there were about 700 fewer building workers on the PUP in the week, while at 111,280, the number of workers from accommodation and food services was also down slightly.               

S&P Global Ratings highlighted the relative success of the US in vaccinating its people, predicting that the country could reach "herd immunity" by mid-year.

"With average US vaccinations per day exceeding 1.4 million in the past week, and manufacturing capacity improving, we think the country could achieve herd immunity around mid-year," S&P said. 

"Similarly, we estimate that the target population of 70% in the EU will receive vaccinations by August 2021, and half by late June," it said. 

In its analysis, S&P said that additional supply from Pfizer-BioNTech will help the EU to reach the 70% vaccination target by late-July "if production steps up".

More in this section

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up