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(Alliance News) - Stocks in London are set to see another dramatic swing on Thursday after the US reported its first confirmed case of Covid-19 variant Omicron.
In some good news on the virus variant front, GlaxoSmithKline said its sotrovimab monoclonal antibody treatment for Covid-19, being developed with Vir Biotechnology, appears to work against Omicron's mutations.
In other UK company news, retail investment platform AJ Bell treated shareholders to a special dividend after a record year.
IG says futures indicate the FTSE 100 index of large-caps to open down 68.28 points, or 1.0%, at 7,099.40 on Thursday. The FTSE 100 closed up 109.23 points, or 1.6%, at 7,168.68 on Wednesday.
Stock markets have been volatile globally since the end of last week, when traders began to panic that a new coronavirus variant, now known as Omicron, could derail economic recovery.
European equities advanced on Wednesday on hopes that existing vaccines will prove resilient against the new strain. But news that Omicron has reached US shores sent Wall Street tumbling overnight.
According to a statement by the Centers for Disease Control & Prevention, the person, who was fully vaccinated, returned from South Africa on November 22 and tested positive on November 29.
"We feel good that this patient not only had mild symptoms, but actually the symptoms appear to be improving," said top health official Anthony Fauci.
While the person involved was fully vaccinated, Fauci stressed a Covid booster remained a good idea because it raises the number of overall antibodies in a person's immune system, some of which will remain effective at stopping new variants.
In the US on Wednesday, Wall Street ended deep in the red. The Dow Jones Industrial Average finished down 1.3%, the S&P 500 down 1.2% and the Nasdaq Composite down 1.8%.
"With cases being reported everywhere it was only a matter of time before the US got its first case, so for US markets to react in the way they did yesterday is a little bit surprising, though given how fickle sentiment has been recently maybe we shouldn't be," said Michael Hewson, chief market analyst at CMC Markets.
The downbeat mood carried into Asia. The Nikkei 225 index in Tokyo ended down 0.7%. In China, the Shanghai Composite ended down 0.1%, while the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney lost 0.2%.
But there was some good news on the Omicron front from GlaxoSmithKline, which said that preclinical data showed sotrovimab, an investigational monoclonal antibody treatment for Covid-19, retains activity against key mutations of the new variant.
The findings were generated through pseudo-virus testing of specific individual mutations found in Omicron. GSK, alongside collaboration partner Vir Biotechnology, are now completing in vitro pseudo-virus testing to confirm the results. An update is expected by the end of 2021.
"Though early, these pre-clinical data support our long-held view on the potential for sotrovimab to maintain its activity as the virus continues to mutate," said Hal Barron, chief scientific officer & president for R&D at GSK.
Separately, the UK Medicines & Healthcare products Regulatory Agency on Thursday said it has authorised sotrovimab to treat people at high risk of developing severe Covid-19.
"It is too early to know whether the omicron variant has any impact on sotrovimab's effectiveness, but the MHRA will work with the company to establish this," the regulator said.
Elsewhere in early UK company news, outsourcer Serco reiterated 2021 guidance and laid out new medium-term targets.
Ahead of a capital markets day being held on Thursday, Serco said it expects its addressable market to grow around 2% to 3% per year over the medium-term, and it expects its own revenue will grow at twice this rate, at around 4% to 6% from a base year of 2022. It is targeting margin growth of 50 to 100 basis points to 5% to 6%, as well as the conversation of at least 80% of operating profit into cash.
Serco plans to reduce dividend cover to around 3 times from 4 times.
Chief Executive Rupert Soames said reduced government spending on the pandemic will knock revenue and profit in 2022, but he anticipates good growth in the parts of the business not involved in Covid services.
"At our Capital Markets Event this afternoon we will show investors why we expect the market for government services to continue to be robust, and, from 2022 onwards, how our strong and differentiated position will enable us to grow our revenues faster than the market, our profits faster than our revenues, and our returns to shareholders faster than profits," said Soames.
Investment platform AJ Bell rewarded shareholders with a special dividend after reporting a record year.
Separately, the FTSE 250 constituent said it has appointed Peter Birch as chief financial officer. He joins from accountants Deloitte, where he is currently a financial services audit and assurance partner.
AJ Bell's total customers rose 30% to 382,754 and assets under administration grew to stand at GBP72.8 billion on September 30, up 29% from a year ago. Revenue in the financial year increased 15% to GBP145.8 million and pretax profit expanded 13% to GBP55.1 million.
AJ Bell raised its final dividend by 13% to 4.50p and, in light of the strong results, also declared a special payout of 5.00p. This took the year's total dividend to 11.96p, nearly double the 6.16p paid out for the year before.
Chief Executive Andy Bell said the special dividend reflects the company's confidence in its outlook.
Looking ahead, AJ Bell said it expects customer activity to remain at normalised levels following elevated activity during lockdown. However, it noted that any increase in interest rates is likely to have a favourable impact on recurring ad valorem revenue.
"The D2C market continues to develop and grow quickly with lots of new entrants into the market, and whilst demand for advised products remains high, the number of advisers and advice firms remains fairly constant. We remain well positioned in both markets to meet the challenges that may arise and capitalise on the opportunities presented," said AJ Bell.
Luxury car maker Aston Martin said Kenneth Gregor is stepping down as chief financial officer for personal reasons, departing no later than June 30. Aston Martin has started looking for his successor.
Ryanair's November traffic jumped to 10.2 million after carrying just 2.0 million passengers a year ago. However, the figure was the lowest since July, when traffic was 9.3 million, having carried in excess of 11 million passengers in October.
The Irish low-cost airline operated over 62,300 flights in November with an 86% load factor, improved from 62% a year prior.
North Sea benchmark Brent oil was trading at USD70.28 a barrel early Thursday, down against USD71.88 late Wednesday.
Major oil producers are due to meet Thursday to decide on output levels from January onwards, which could be frozen as the new Covid variant Omicron sparks turmoil.
The OPEC+ alliance led by Saudi Arabia and Russia has so far resisted US-led pressure to significantly boost output to rein in surging energy prices. The emergence of the new variant has further complicated the equation, leading to countries reinstating travel bans and mulling further restrictions that could tighten demand and hurt oil prices.
The 13 members of the Organization of the Petroleum Exporting Countries and their 10 allies are due to meet from 1300 GMT via video conference after technical discussions.
Elsewhere, the economic events calendar on Thursday has eurozone producer prices at 1000 GMT and the latest US jobless claims numbers at 1330 GMT.
Sterling was quoted at USD1.3287 early Thursday, falling from USD1.3315 at the London equities close on Wednesday.
The euro traded at USD1.1316, soft against USD1.1325 late Wednesday. Against the yen, the dollar firmed to JPY113.18 versus JPY113.02.
Gold was quoted at USD1,776.09 an ounce, lower than USD1,785.55 on Wednesday.
By Lucy Heming; lucyheming@alliancenews.com
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