Pound hits $1.40 on vaccine optimism; UK retail sales tumble 8.2% – business

Wall Street has opened higher, and European markets are also grinding higher.

• Dow Jones up 67 points, or 0.21%, at 31,560
• S&P 500 up 12 points, or 0.32%, at 3,926
• Nasdaq up 63 points, or 0.46%, at 13,928
• UK’s FTSE 100 up 13 points, or 0.21%, at 6,631
• Germany’s Dax up 11 points, or 0.82%, at 14,001
• France’s CAC up 39 points, or 0.69%, at 5,766
• Italy’s FTSE MiB up 28 points, or 0.27%, at 10,746

The pound has jumped 0.4% against the dollar to $1.4026, the first time it has hit $1.40 since April 2018, as investors are betting on a swift economic recovery on the back of the UK’s successful vaccination drive.

Stock markets are drifting higher after three days of losses, with investors clinging to hopes of economic recovery on the back of Covid-19 vaccination campaigns in the months ahead. The pan-European index is 0.52% ahead.

The FTSE 100 index in London is 0.23% ahead, buoyed by mining and banking shares. NatWest has recovered and is now among the biggest risers even though it swung to a full-year loss. Even so, it resumed dividend payouts, like Barclays yesterday. NatWest shares are up nearly 4% while Barclays is 3.8% ahead.

NatWest also declared its intention to pull out of the Republic of Ireland and to wind down Ulster Bank. This puts 3,000 jobs at risk, according to the Unite union.

Shares in the Parisian luxury house Hermès rose as much as 5.7% after the maker of chic handbags and silk scarves reported a sharp recovery in sales in the fourth quarter, driven by a near-50% jump in sales in Asia.

The Frankfurt stock market rose 0.83%, the Paris bourse added 0.82% and the borsa in Milan rose 0.87%. US stock futures are pointing to a higher open on Wall Street in an hour’s time.

Markets have been buoyed by positive vaccine news. Pfizer/BioNtech’s Covid-19 vaccine greatly reduces virus transmission, two Israeli studies have found. You can read more on our coronavirus live blog.

At the same time, big pharma companies are under growing pressure to provide fairer access to vaccines.

The scramble over Covid vaccines should alert rich countries to the power of profit-driven companies that control production of crucial medicines, said Mustaqeem De Gama, South Africa’s delegate at the World Trade Organization (WTO) on intellectual property rights.

Some good vaccine news from Pfizer/BioNTech on their mRNA vaccine for coronavirus that is commonly stored at -70C. It is actually stable at lower temperatures for two weeks, tweeted Pfizer chief executive Albert Bourla.

Manufacturing activity remains patchy, but has held up better than during the first lockdown, according to the latest CBI industrial trends survey. Factory output fell slightly in the quarter to February, but at a slower rate than in the first Covid-19 lockdown last spring.

The survey of 296 manufacturers found that output increased in 11 of the 17 sub-sectors. However, growth in these sub-sectors was outweighed by sharp falls in others – particularly motor vehicles & transport equipment and food, drink & tobacco. Looking ahead, manufacturers anticipate output to be broadly flat over the next three months, marking a notable improvement on expectations of a significant decline in January.

Total orders books improved, to a similar position as in December 2020, while export order books worsened from January. Both continue to be far weaker than their long-run averages.

Alpesh Paleja, CBI lead…