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(Alliance News) - Stock prices in London are seen opening slightly higher on Wednesday, rebounding from steep falls on Tuesday, as a surge in coronavirus cases in countries including India and Japan weighs on investor sentiment.
In early company news, distribution firm Bunzl reported a rise in revenue in the first quarter. Generic drugmaker Hikma Pharmaceuticals resumed the launch of its Advair Diskus treatment in the US. Chilean copper miner Antofagasta left annual production guidance unchanged, but Anglo-Australian BHP reduced guidance for coal production.
IG futures indicate the FTSE 100 index is to open 9.93 points higher at 6,869.80. The blue-chip index closed down 140.21 points, or 2.0%, at 6,859.87 Tuesday.
Bunzl said its "diversified and resilient" business model delivered good overall growth amid continuing pandemic-related challenges during the first quarter of 2021.
Revenue was up 5.4% at actual exchange rates and 10% at constant exchange rates. Underlying revenue growth at constant exchange rates increased by 1.4%, in line with expectations.
In addition, Bunzl said adjusted operating margin continued to be supported by demand for Covid-19 related products. The company delivered personal protective equipment to businesses during the pandemic.
Looking ahead, Bunzl said guidance remains unchanged. At constant exchange rates, Bunzl continues to expect robust revenue growth in 2021 compared to the prior year, after excluding larger Covid-19 related orders, which contributed GBP550 million of revenue in 2020.
"A recovery in sales of other products is expected to be largely offset by a decline in smaller Covid-19 related orders, while recent acquisitions will further contribute to the group's performance in 2021. After excluding larger Covid-19 related orders, the group continues to expect good organic revenue growth in the first half of 2021 to be followed by a moderate decline in the second half. Group adjusted operating margin for the year is expected to return to a more historical level," Bunzl said.
Hikma Pharmaceuticals said it has that it has resumed the launch of its generic version of GlaxoSmithKline's Advair Diskus in the in the US.
The move follows the US Food & Drug Administration's approval of an amendment that Hikma had submitted to its Abbreviated New Drug Application in January. The amendment reflected enhanced packaging controls to meet new industry standards adopted since the initial submission of its application, Hikma said.
Chief Executive Officer Siggi Olafsson said: "We appreciate the FDA's timely review and approval of our amendment and are now immediately resuming the launch of our high quality, substitutable generic version of Advair Diskus. We are very pleased to improve availability of this critical medicine for patients and healthcare providers in the US."
Antofagasta said copper production in the first quarter was in line with guidance at 183,000 tonnes, 5.7% lower than in the same quarter in 2020 and 5.0% lower than in the fourth quarter, mainly due to expected reduced grades at the Los Pelambres mine.
Gold production was 59,100 ounces in the first quarter, 9.2% lower than in the same period in 2020 and 8.0% higher than in the fourth quarter, mainly due to changes in grade at the Centinela mine.
Looking ahead, Antofagasta said full-year guidance is unchanged at 730 tonnes to 760,000 tonnes of copper at a net cash cost of USD1.25 per pound and capital expenditure of USD1.6 billion.
CEO Ivan Arriagada said: "Labour negotiations were successfully concluded at Los Pelambres and no further negotiations are scheduled at our mining operations until next year.
"The copper market continues to perform strongly, and we expect this to continue as structural supply and demand dynamics support a tight physical market. In the meantime, we maintain our focus on cost control and disciplined capital allocation. Production, cost and capital expenditure guidance for the full year is unchanged, assuming no additional nationwide restrictions are imposed due the pandemic."
BHP lowered guidance for coal production after wet weather hit operations.
The miner said copper production in the first quarter of 2020 fell 8% year-on-year to 391,400 tonnes. Petroleum production increased 1% compared to the year before to 25.4 million barrels of oil equivalent. Iron ore production was flat to the prior year.
Metallurgical coal production increased 4% year-on-year to 9.6 million tonnes, while energy coal production sank 17% to 4.8 million tonnes. Nickel production slipped 2% year-on-year to 20,400 tonnes.
Going forward, full-year production guidance for petroleum, nickel and iron ore was left unchanged, but it was lowered for metallurgical and energy coal.
In Tokyo, the Nikkei 225 index closed down 2.0% on Wednesday. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was down 1.8%. The S&P/ASX 200 in Sydney closed 0.6% lower.
"Markets in Asia have seen weakness this morning, with the Nikkei falling especially sharply, following on from yesterday's slide in Europe and the US, with markets in Europe expected to open mixed," said CMC Markets analyst Michael Hewson.
The EU will have enough Covid-19 vaccine doses to cover 70% of its adult population by mid-July due to higher production within the bloc, a senior official said Tuesday.
"Fifty-three factories are producing vaccines in the EU. Our continent is now the largest producer in the world after the US," internal markets commissioner Thierry Breton told French daily Le Figaro in an interview.
"I am now certain of how many doses are currently in production and I know how many millions will be delivered each week," he said. "This allows me to assure you that we well have by mid-July the number of doses necessary for vaccinating 70% of the EU's adult population," he said, citing the threshold many health experts say is necessary to achieve "herd immunity".
The pound was quoted at USD1.3945 early Wednesday, flat on USD1.3940 at the London equities close Tuesday.
The euro was priced at USD1.2030, down from USD1.2035. Against the yen, the dollar was quoted at JPY108.01, flat from JPY108.03.
Brent oil was trading at USD66.20 a barrel Wednesday morning, up from USD65.71 late Tuesday. Gold was quoted at USD1,786.71 an ounce, higher from USD1,776.45.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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