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UPDATE 2-UK shares end higher on earnings optimism; AstraZeneca gains

UPDATE 2-UK shares end higher on earnings optimism; AstraZeneca gains

· 03/16/2021 05:12
UPDATE 2-UK shares end higher on earnings optimism; AstraZeneca gains

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Just Group jumps on strong earnings

Unite Group rises on upbeat outlook

UBS bullish on FTSE 100 in 2021

Midcaps end near 13-month high

FTSE 100 up 0.8%, FTSE 250 adds 1.1%

Updates to close

By Shivani Kumaresan and Amal S

- London's FTSE 100 rose on Tuesday following a clutch of upbeat company earnings, while AstraZeneca rose after the European medicine watchdog said it saw little reason to change its stance on the drugmaker's COVID-19 vaccine.

The blue-chip FTSE 100 index .FTSE ended 0.8% higher at its best close since early January, with financials, healthcare and consumer staples stocks among the best performers.

AstraZeneca AZN.L was the top boost to the index after the European Medicines Agency (EMA) head, Emer Cooke, said she saw no reason to change its recommendation of the vaccine. The EMA is still investigating concerns over the shot's safety and will release its findings on Thursday. nL8N2LE2KT nL1N2LE1CE

"The market is starting to appreciate that higher yields are not necessarily a bad thing for stocks, as long as they reflect higher growth and inflation expectations," said Andrea Cicione, head of strategy at TS Lombard.

"Over the last few sessions, investors are gaining a bit more confidence and are getting comfortable with growth again."

A recent rise in treasury yields had hampered an otherwise strong start to the year for UK stocks, as investors feared a bigger-than-expected spike in inflation as economies began to reopen.

Meanwhile, brokerage UBS in a note said it remained bullish on UK equities and raised its FTSE 100 year-end target from 7,200 to 7,600, a 17.6% premium to its 2020 close.

The energy sector was the top laggard for the day, as lower oil prices resulted in losses in oil heavyweights BP Plc BP.L and Royal Dutch Shell Plc RDSa.L. O/R

The domestically focused FTSE 250 index .FTMC rose 1.1% to a near 13-month high, almost completely recovering its losses from the coronavirus crisis.

Specialist pension provider Just Group Plc JUSTJ.L rose 5.2% after it reported an 11% rise in annual earnings and flagged progress in shoring up its capital base. nL4N2LE1XC

Student housing provider Unite UTG.L gained 2.2%, after it forecast a return to full occupancy and rental growth for the upcoming academic year and reinstated dividend for the pandemic-hit 2020. nL4N2LE1W4

(Reporting by Shivani Kumaresan and Amal S in Bengaluru; Editing by Arun Koyyur and Lisa Shumaker)

((Shivani.Kumaresan@thomsonreuters.com; +1 646 223 8780;))

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