StockMarketWire.com - UK markets rallied strongly through the morning session on Monday, buoyed by new hopes that a leading Covid-19 vaccine contender could be approved for use in the next couple of months, and takeover speculation.

At 12.30pm, the benchmark FTSE 100 was up 1.85% at 6,112.93, led by the near-6% jump for BT, at107.5p.

The strong rally came following reports over the weekend that suggested the telecom giant could be targeted for a takeover, either an industry peer or private equity.

The Sky News report claims that BT has not yet received a formal approach from any potential suitor, but that it has spoken it bankers at Goldman Sachs about putting together an updated defence strategy.

COVID VACCINE HOPES

Pharmaceuticals giant AstraZeneca shot up almost 4% to £87.51 after the Financial Times reported that the Trump administration was considering fast-tracking approval of its Covid-19 vaccine before the US presidential election in early November.

Pub chain JD Wetherspoon added 1.3% to 986.25p, even as it warned it would record a loss for the year ended July.

'Spoons also revealed that like-for-like bar and food sales dropped 16.9% for the 44 days to 16 August.

Distribution and services group Bunzl climbed 2% to £24.57, having reinstated its dividend after first-half profit rose by more than a fifth.

Bunzl reinstated its 2019 final dividend of 35.8p and raises its 2020 interim dividend by 1.9% to 15.8p.

Frasers, formerly Sports Direct, reversed earlier gains to slide 1.2% to 342.2p on announcing that it had acquired gym assets from the administrators of Dave Whelan Sports for up to £43.9m.

Education and publishing company Pearson lost 0.2% to 577p as it announced the appointment of former Disney executive Andy Bird as its new chief executive, to replace John Fallon in October.

Mining company Rio Tinto rose 2% to £47.785 after it said three executives, including chief executive J-S Jacques, would have had their bonuses slashed following the company's regrettable decision to blast two ancient Australian cave sites.

Hostel group Safestay dropped 7.8% to 12.45p, having announced that it expected to breach debt covenants at the end of the year and was currently in talks with lender HSBC to agree waivers, amid a slump in demand due to the pandemic.

Saftestay also said that it was considering asset sales or an equity raising to bolster its balance sheet.

ELSEWHERE AROUND THE MARKET

Infrastructure group Balfour Beatty firmed 1.1% to 238.2p after its Gammon joint venture won a four-year contract to expand Terminal 2 at Hong Kong International Airport.

Consumer goods group UP Global Sourcing, also known as Ultimate Products, rose 5.2% to 93.7p after it repaid funds received under the UK government's Covid-19 furlough scheme amid a better-than-expected profit performance.

Property developer and investor Henry Boot gained 2.0% to 260p, even as it cut its dividend and reported a fall in first-half profit.

The fall in profit, however, was slightly ahead of its revised expectations owing to the performance of its land promotion business. Henry Boot declared an interim dividend of 2.2p, down from 3.7p a share.

Aerospace, defence and energy component supplier Meggitt added 1.8% to 285.2p, having won a contract from Modec for the supply of printed circuit heat exchangers to the Bacalhau floating production storage and offloading vessel.

Auto retailer Motorpoint advanced 1.8% to 275.84p on announcing that trading had bounced back in recent weeks following an easing of lockdowns.

Motorpoint also announced that chief financial officer James Gilmour had stood down to pursue other business interests.

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