FTSE 100 keeps rising despite vaccine concerns

• FTSE 100 gains 46 points
• Miners lead the push higher
• Rolls-Royce weak on summer shut-down report

10.45am:

London’s blue chip shares are on the front foot this morning, led by miners and financials, despite some coronavirus vaccine worries.

The South African government has decided to stop administering the vaccine developed at Oxford University with the help of AstraZeneca (LON:AZN) after new trials indicated it gave little protection against mild to moderate infection from the South African variant of COVID-19, though it did better against more severe infections.

It’s not just investors in London who are shrugging this off.

“European markets have brushed aside concerns around the AstraZeneca vaccine this morning, with traders instead happy to maintain an optimistic mentality following an impressive first week of February,” said market analyst Joshua Mahony at IG.

“Airlines have been somewhat more sensitive to those vaccine questions, with the lack of protection against the South Africa strain meaning we are likely to see restrictions on travel sustained for some time yet to avoid greater imported cases.”

He said South Africa’s decision to halt use of the Oxford vaccine highlight the risk that the UK “could be focusing too much on a product which offers less protection”.

Focusing on financial markets, the prospect of a Joe Biden getting his big stimulus package over the line, remains a big driver of market optimism.

“Weekend comments from Janet Yellen sought to allay fears of a ramp-up in inflation should the $1.9trn package come to fruition, with the Treasury Secretary noting that the risk is of inaction rather than over-delivering.

“While markets can sometimes reflect economic strength or weakness, Friday’s disappointing jobs report was music to the ears of those seeking to back the $1.9 trillion stimulus package. Clearly the US economic picture remains subdued under the weight of the Covid pandemic, and Friday’s numbers provided a timely reminder of the need to act fast.”

The Footsie is up 49 points or 0.75% to 6,537.94.

9.50am: Online retailers slide

While the giants of the Footsie are mostly higher, the more domestically focused FTSE 250 and the small caps of the AIM All Share are both in the red.

The mid-cap index is down 0.4% at 20,981.05 and the AIM index, which reached a post-financial crisis high last week, was down 0.5% at 1,205.

Among AIM’s biggest fallers is () despite sealing a £25mln deal to scoop up the last remaining brands from Philip Green’s collapsed Arcadia group: Burton, Dorothy Perkins and Wallis.

Another is its online shopping rival (), which Last week acquired Arcadia’s Topshop, Topman, Miss Selfridge and HIIT brands for £265mln.

This pair, along with fellow online retailers Ocado () and AO World (), are in the red after reports the UK government is mulling a tax raid on companies that have profited from the pandemic.

“This may raise a question about opportunistic tax policy,” said analyst Neil Wilson at Markets.com, “however most people feel online retailers are not paying their fair share and the burden is falling too much on struggling high street stores.

“It’s never made sense that bricks-and-mortar businesses pay more in tax than the very rivals who are stripping away their market share. A possible tax hike aimed squarely at online sales presents a near-term overhang for these stocks, but they remain structurally well positioned to capture more sales as consumer habits continue to shift online.”

As well as AO World, main fallers on the FTSE 250 include high street retailers Marks & Spencer Group () and Frasers Group (), along with travel groups (), easyJet () and ().

Traders said this may reflect some concern about the efficacy of coronavirus vaccines against the new South African variant of the virus, following the release of new trials of the and Oxford University jab over the…