U.K. Stocks Rally as Lockdown Easing Provides Retail Relief

(Bloomberg) -- U.K. stocks rose after Prime Minister Boris Johnson outlined plans for the re-opening of outdoor markets, car showrooms and shops in England next month, providing relief for retailers that have been forced to shut down in an effort to control the spread of the coronavirus.

The benchmark FTSE 100 Index rose as much as 2.3% on Tuesday -- outpacing other major European gauges -- with airlines and travel stocks among the biggest gainers on optimism about travel restrictions easing in some European countries, and retailers rising after the government’s announcement. U.K. stock markets were closed for a public holiday Monday, while Europe’s benchmark Stoxx 600 rose 1.5% that day amid a bailout for Deutsche Lufthansa AG.

Consumer stocks rose after Johnson said Monday evening that England’s outdoor markets and car showrooms will be able to reopen from June 1, as soon as they are able to meet the coronavirus guidelines to protect shoppers and workers, while all other non-essential retail outlets will be expected to be able to reopen from June 15 if the government can control the spread of the virus. U.K. car dealership stocks including Pendragon Plc and Vertu Motors Plc jumped.

“Lockdown has caused considerable damage to the U.K. consumer economy,” Shore Capital analysts including Clive Black wrote in a note Tuesday, calling the re-opening plans a relief for non-discretionary retailers. “We expect calendar year 2021 to be one of stabilization at this stage.” British midcap stocks also rallied, with the FTSE 250 Index gaining as much as 2.9% to the highest since April 30.

Next Plc shares rose as much as 6.6% on Tuesday, while Primark owner Associated British Foods Plc gained as much as 6.2%. Both stocks are down 31% so far this year. Pub operator JD Wetherspoon Plc -- which last week outlined plans to reopen its 875 pubs with special precautions when it has the official go-ahead -- surged as much as 10%, while Marston’s extended its rally following Friday’s announcement on a brewing joint venture with Carlsberg A/S. PayPoint Plc, which provides in-store bill payment services for customers, rose as much as 9.5%.

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