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(Alliance News) - Stock prices in London were called higher on Wednesday, returning from the Christmas break for a shortened trading week before packing up again after a half-day on New Year's Eve.
In a quiet morning of corporate news, AstraZeneca has agreed a development deal for eplontersen, Fresnillo's Juanicipio has hit a Covid snag, and Round Hill Music now owns part of the publishing rights of country singer Niko Moon.
IG futures indicate the FTSE 100 index will open up 59.20 points, 0.8%, at 7,431.30. The blue-chip index closed down just 1.24 points at 7,372.10 in the half-day session on Christmas Eve.
"Although Omicron cases in the US and Europe amongst others, continue to surge, it has yet to make its presence felt negatively in economic data. Europe's restrictions will have a tail impact but, for now, markets are overwhelmingly pricing in the latest variant as a milder incarnation, despite its easier contractibility," Oanda analyst Jeffrey Halley said.
"With market activity much reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole."
England and Wales on Tuesday reported nearly 130,000 new coronavirus infections, a record daily tally as Omicron variant cases surge and the responses of the UK's four nations continue to diverge.
Authorities in London and Cardiff announced 129,471 new cases, while the devolved government in Scotland provisionally recorded 9,360 infections and Northern Ireland released no new data due to the Christmas holidays.
Recent weeks have seen daily cases cross the 100,000 threshold across the UK for the first time during the pandemic, as Omicron has become the dominant strain of Covid-19. Following the recent rise in infections, the devolved governments in Scotland, Wales and Northern Ireland have each introduced renewed curbs on hospitality and bigger social gatherings.
But UK Prime Minister Boris Johnson, who has responsibility for health policy in England only, has so far decided against following suit with tougher restrictions there.
The World Health Organization believes Omicron still poses a "very high" risk and could overwhelm healthcare systems.
Case numbers have shot up 11% globally in the last week, forcing governments from China to Germany and France to find a difficult balance between anti-virus restrictions and the need to keep economies and societies open.
While some studies suggested it causes milder Covid-19, the WHO urged caution.
"The overall risk related to the new variant of concern Omicron remains very high," the UN health agency said in its Covid-19 weekly epidemiological update.
"Consistent evidence shows that the Omicron variant has a growth advantage over the Delta variant with a doubling time of two to three days."
In London early Wednesday, AstraZeneca said it has agreed to a global development and commercialisation agreement with California-headquartered Ionis Pharmaceuticals Inc for eplontersen, formerly known as Ionis-TTR-LRX.
The drug helps to treat TTR amyloidosis by reducing the production of transthyretin, or TTR protein.
The two pharma firms will jointly develop and commercialise eplontersen in the US, while Astra will develop and commercialise it in the rest of the world, except in Latin America.
As part of the deal, Astra will pay an upfront fee of USD200 million, and will make additional conditional payments of up to USD485 million upon regulatory approvals.
After that, Astra will pay up to USD2.9 billion of sales-related milestones based on sales thresholds between USD500 million and USD6 billion, plus royalties in the range of low double-digit to mid-twenties percentage depending on the region.
Miner Anglo American confirmed it has entered talks with Brazilian peer Vale SA over the potential to potentially jointly develop the Serpentina iron ore resource. Anglo noted that Vale's Serpentina is contiguous to its integrated Minas-Rio iron ore operation in Brazil.
"These discussions are preliminary in nature and there can be no certainty that any agreement will be reached or, if any agreement is reached, on the terms or scope of any such agreement," Anglo added.
Fellow blue-chip miner Fresnillo said its 44%-owned Juanicipio project continues to face delays.
The Mexican state-owned electricity utility, Comision Federal de Electricidad, has told Fresnillo that approval to complete the tie-in to the national power grid cannot yet be granted and the mill commissioning timeline will therefore be extended by approximately six months.
"This is directly related to knock-on effects of the pandemic on the CFE's operations, predominantly related to a lack of CFE staff which limits its ability to oversee three key tasks to: review the existing installation; supervise physical connection to the active power grid; and approve required blackout prevention devices," Fresnillo explained.
The miner said it will "do all that it can to expedite these necessary approvals". Full load commissioning activities are now expected to be approved sometime after the first week of May 2022.
Fresnillo Chief Executive Octavio Alvidrez said: "As an industry, we continue to manage the ongoing impact of the pandemic and while frustrating for all concerned, we recognize this situation is beyond the control of all parties."
The remaining 56% of the project is owned by Canada-based development and exploration company MAG Silver Corp.
Round Hill Music Royalty Fund has acquired a "significant share" of the publishing rights of Niko Moon, a US country singer.
The deal comprises 29 compositions, including songs performed by Zac Brown Band, Avicii, and Sir Rosevelt. The top songs ranked by revenue are: Homegrown, Keep Me in Mind, Heavy is the Head, Beautiful Drug and Loving You Easy.
Round Hill did not disclose the financial details of the deal but noted the catalogue has a revenue mix of 37% mechanical, 52% performance, 10% sync and 1% other.
Chair Trevor Bowen said: "We are pleased to announce the acquisition of this important catalogue. This acquisition highlights Round Hill's ability to source and acquire attractive catalogues in a highly diverse array of music markets. This acquisition will bolster the portfolio's country and pop assets, further diversifying the portfolio by genre and income type."
In the US on Tuesday, Wall Street ended mixed, as a holiday rally showed signs of fatigue and even as US health authorities eased requirements on Covid-19 quarantine time.
The US Centers for Disease Control & Prevention cut the isolation period for asymptomatic Covid-19 cases in half to five days "followed by five days of wearing a mask when around others."
The Dow Jones Industrial Average closed up 0.3%, while the S&P 500 lost 0.1% and the Nasdaq Composite gave back 0.6%.
Halley continued: "It was a mostly sideways session overnight in New York, the US dollar remained steady, oil held near recent highs, and the equity rally paused for breath. The dearth of data releases globally continued, although the second-tier data from the US continued to be positive."
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite ended 0.9% lower, while the Hang Seng index in Hong Kong was down 1.0% in late trade.
Sydney reopened for the first time since Christmas Eve, and the S&P/ASX 200 closed 1.2% higher.
"The most interesting data tonight will likely be US official crude oil inventories, where Omicron's rampage could show up in higher oil derivative stockpiles. That may give the oil recovery some food for thought but is very unlikely to derail it. The fast-money tail-chasers inhabiting the oil market recently look like they are finally taking a holiday break instead of drinking too much coffee," Oanda's Halley said.
Brent oil was quoted at USD79.11 a barrel Wednesday morning, up from USD76.00 at Friday's equities close in London.
The OPEC+ group of oil producers holds a video meeting on Tuesday next week to discuss its production cuts.
Gold stood at USD1,806.20 early Wednesday, soft from USD1,808.50 late Friday in London.
The pound was quoted at USD1.3418 early Wednesday, flat on USD1.3416 at the London equities close last Friday.
The euro was priced at USD1.1298, down from USD1.1330 on Friday. Against the yen, the dollar was trading at JPY114.87, rising from JPY114.38.
By Paul McGowan; paulmcgowan@alliancenews.com
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