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(Alliance News) -Â London stocks started Thursday's session on the front foot ahead of US jobs data due later in the day, with the mood lifted by encouraging Covid-19 vaccine news from BioNTech and Pfizer.
Associated British Foods topped the FTSE 100 as it noted Primark stores have opened more quickly than anticipated, while DS Smith was the worst blue-chip performer after deciding against a payout.
The FTSE 100 index was up 39.22 points, or 0.6%, at 6,197.18 early Thursday. The mid-cap FTSE 250 index was 148.93 points higher, or 0.9%, at 17,338.36. The AIM All-Share index was up 0.1% at 883.87.
In mainland Europe, the CAC 40 in Paris was up 0.7% while the DAX 30 in Frankfurt was 1.0% higher early Thursday.
"An injection of optimism from vaccine news has spurred stocks higher. Asian markets advanced overnight with the upbeat mood spilling into Europe for the open," said Fiona Cincotta at City Index.
BioNTech of Germany and US pharmaceutical giant Pfizer reported positive preliminary results on Wednesday from a joint project to develop a coronavirus vaccine.
Known as BNT162b1, it produces antibody responses at or above the levels seen in any convalescent serum – blood from people who have recovered – at relatively low doses, according to BioNTech Chief Executive Officer Ugur Sahin. The preliminary data come from a so-called phase 1/2 trial that aimed to show the vaccine is not toxic and triggers an immune system response to prepare the body to fight off the virus.
Of 45 people aged 18 to 55 who took part in the trial, most received two doses, 21 days apart, of the vaccine or a placebo.
A relatively high number of participants developed a fever after the second dose, according to a study uploaded on the pre-publication website medrxiv.org. But this is not unexpected and is not considered a stumbling block.
The news comes as US notched more than 52,000 new Covid-19 cases in 24 hours Wednesday, a tally by Johns Hopkins University showed, a new one-day record as infections surge around the country.
New daily case numbers have hovered around 40,000 in recent days, with Johns Hopkins recording 42,528 new infections one day earlier. Hospitalizations are also increasing in several cities, including Houston, Texas and Phoenix, Arizona.
On Wednesday Texas broke its daily record and reported 8,076 new cases of Covid-19, nearly 1,000 more than the day before.
The surge in cases has seen several states pause their re-openings. California on Wednesday banned indoor dining in Los Angeles as well as service in bars, cinemas and museums for at least three weeks.
City Index's Cincotta said: "Vaccine news has been in short supply over recent weeks. News that a vaccine from Pfizer and Germany’s BioNTech produced a strong immune response and is being well tolerated in early stage human trials has been well received. Particularly as the number of coronavirus cases top 10.5 million globally and the cases in the US are increasing at a daily rate of around 50,000 a day, whilst reopening measures are being halted."
In Asia on Thursday, the Nikkei 225 index in Tokyo closed up 0.1%. The Shanghai Composite ended up 2.1%. The Hang Seng index is up 2.3% as Hong Kong reopened after a local holiday on Wednesday.
Associated British Foods was at the top of London's FTSE 100 in opening trade, up 7.4%.
The firm expects profit at low-cost fashion retailer Primark to be a third of what was achieved a year ago, but noted that stores have reopened more quickly than expected, particularly in Ireland, since its June 1 trading update.
A total of 367 stores now have reopened, with the remaining 8 expected to follow in the near future, it said.
AB Foods group revenue for the 40 weeks to June 20 was down 13% on a year ago at constant currency, with sales down 39% in the third quarter alone. Among divisions in the third quarter, grocery was the stand-out performer, with revenue up 9%, while retail sales at Primark slumped a sharp 75%.
Primark stores were closed for most of the third quarter, with revenue recorded in the period relating to two short periods of trading before stores closed in mid-March and after they reopened at the end of the quarter. The net cash outflow for Primark in the 12 week period to May 23 - when trading was non-existent or minimal - was around GBP800 million. This comprised payments to suppliers and operating expenses.
Looking ahead, AB Foods said: "For the full year we continue to expect strong progress in the aggregate adjusted operating profit of our Sugar, Grocery, Agriculture and Ingredients businesses. This will be mainly driven by a material increase in profit at AB Sugar and another year of good margin and profit growth in Grocery."
Nearly all Primark stores are now trading again, the company said, and absent a significant number of further store closures, adjusted operating profit for Primark, excluding exceptional charges, will be in the range of GBP300 million to GBP350 million for the full year, compared to GBP913 million reported for the last financial year.
DS Smith shares fell 11% after the firm opted against a final dividend.
For the 12 months to April 30, the London-headquartered packaging firm's pretax profit improved 5.1% to GBP368 million from GBP350 million. Revenue, however, slipped 2.1% to GBP6.04 billion from GBP6.17 billion. Profit grew despite a drop in revenue, DS Smith said, as it recorded GBP237 million in profit from discontinued operations, compared to GBP12 million the year before.
DS Smith said its performance in the first 10 months of its financial year was "robust", but then took a "relatively limited" GBP15 million hit from the pandemic in the final two months.
Over the period, organic corrugated box volumes grew 0.6% - ahead of its target of 0.4% growth - with a 1.5% year on year rise in the second half. DS Smith said its volumes in the first 5 months of the second half were ahead of market expectations but April saw a 4.5% decline.
The FTSE 100-listed packaging firm has already declared it would not issue an interim dividend, but has now also decided against a final dividend too - as its short term outlook "remains too uncertain".
Auto Trader was down 2.0% after Liberum cut the digital car marketplace to Hold from Buy.
Ryanair shares were up 1.6%. June traffic was down 97% year-on-year to 400,000 passengers from 14.2 million a year ago, the low-cost airline said, as it operated just over 2,800 scheduled flights in June out of its budget of 79,600.
Austrian subsidiary Lauda flew no passengers at all in June.
Ryanair's figures do, though, mark an improvement on May. The Irish budget airline reported a 99.5% dive in May traffic to just 70,000 passengers.
Peer Wizz Air reported a 86% decrease in passengers in June, carrying 502,253 versus the year-ago figure of 3.6 million. Load factor slumped to 52.2% from 95.0%.
Wizz Air shares were up 1.9%.
The economic events calendar on Thursday has eurozone unemployment and producer prices at 1000 BST. In the afternoon, there is the US jobs report for June at 1330 BST - brought forward from the usual release day of Friday due to this week's Independence Day holiday.
Consensus is for 3.0 million jobs to have been added in June, up from 2.5 million in May, according to FXStreet. The unemployment rate is expected to edge down to 12.3% from 13.3%.
The dollar was mostly lower ahead of the jobs print.
Sterling was quoted at USD1.2481 early Thursday, up from USD1.2459 at the London equities close on Wednesday. The euro traded at USD1.1262 early Thursday, firm on USD1.1260 late Wednesday.
Against the yen, the dollar was quoted at JPY107.5, flat versus JPY107.52.
Gold was quoted at USD1,768.83 an ounce early Thursday, up from USD1,764.23 on Wednesday. Brent oil was trading at USD42.34 a barrel early Thursday, higher than USD41.80 late Wednesday.
By Lucy Heming;Â lucyheming@alliancenews.com
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