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UK shares gain on vaccine hopes; Ladbrokes owner soars

Shashank Nayar and Shivani Kumaresan
·2-min read

By Shashank Nayar and Shivani Kumaresan

(Reuters) - British shares closed higher on Monday in the first trading session of the new year, buoyed by optimism around vaccine rollouts, while a jump in metal prices helped boost the export-heavy FTSE 100 index.

The blue-chip index rose 1.7% on its first day of trading with Britain outside the European Union's orbit, with shares of Entain the top gainer.

The Ladbrokes owner surged 25.3% to an all-time high after saying it received proposals from U.S. casino operator MGM Resorts for a possible offer.

"We are seeing optimism on the first day trading on the back of a very positive month of December in which a collection of major risk events such as the Brexit deal and vaccine approval went in the right direction," said Craig Erlam, senior market analyst at OANDA.

Mining shares and consumer stocks were among the top gainers, with Rio Tinto giving the biggest boost to the index. Unilever and Reckitt Benckiser Group advanced between 1.5% and 3.6%.

The mid-cap index jumped 0.2%.

However, limiting gains was Prime Minister Boris Johnson's warning that tougher lockdown restrictions were probably on the way as COVID-19 cases keep rising.

"The near-term risks from this ferocious wave of COVID that we are seeing may be a drag on sentiment in near term," Erlam said.

Analysts at Deutsche Bank say markets would now be closely watching any issues with COVID-19 or the vaccine rollout, given that the new coronavirus variants, found in the UK and South Africa, have been detected in several other countries.

Drugmaker AstraZeneca jumped 1.3% after Britain became the first country to roll out its low-cost and easily transportable COVID-19 vaccine, the second vaccine candidate to be distributed.

(Reporting by Shashank Nayar and Shivani Kumaresan in Bengaluru; Editing by Uttaresh.V and Matthew Lewis)