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(Alliance News) - Stock prices in London are seen opening sharply lower on Monday due to fears the spread of the Omicron coronavirus variant will see new curbs implemented before Christmas.
In early company news, jet engine maker Rolls-Royce announced an agreement with Qatar Investment Authority for its nuclear power business. Drugmaker GlaxoSmithKline picked the former chief executive of grocer Tesco to chair its consumer healthcare business. Thermal processing services provider Bodycote also named a new chair.
IG futures indicate the FTSE 100 index is to open 113.22 points lower at 7,156.70. The blue-chip index closed up 9.31 points, or 0.1%, at 7,269.92 on Friday.
In Asia on Monday, the Nikkei 225 index in Tokyo closed down 2.1%. In China, the Shanghai Composite ended down 1.1%, while the Hang Seng index in Hong Kong was down 2.0%. The S&P/ASX 200 in Sydney lost 0.2%.
Rolls-Royce said its has reached an agreement with Qatar Investment Authority to invest GBP85 million in new venture Rolls-Royce Small Modular Reactor.
Rolls-Royce SMR will construct mini nuclear reactors - a tenth the size of current ones - that each can power a million homes. QIA will take 10% of the equity in the venture, joining BNF Resources UK and Exelon Generation as shareholders alongside Rolls-Royce.
Rolls-Royce said the SMR business is now fully funded, having secured GBP490 million through commercial equity and UK government grants.
GlaxoSmithKline said it has appointed Dave Lewis as non-executive chair designate of the new Consumer Healthcare company, which will result from the proposed demerger from GSK in 2022. His appointment will take effect from January 1.
Lewis was chief executive of supermarket chain Tesco from 2014 to 2020 and was widely credited with turning around the retailer's fortunes.
GSK's consumer healthcare business, formed in 2019 as a joint venture with Pfizer, is expected to take a premium listing on the London Stock Exchange.
Pharmaceutical peer AstraZeneca said its lupus treatment Saphnelo has been recommended for marketing authorisation in the European Union.
Saphnelo is an add-on therapy for the treatment of adult patients with moderate to severe, active autoantibody-positive systemic lupus erythematosus, or SLE.
AstraZeneca said the Committee for Medicinal Products for Human Use of the European Medicines Agency based its positive opinion on results from the Saphnelo clinical development programme, including the Tulip phase III trials and the Muse phase II trial.
Executive Vice President of BioPharmaceuticals R&D Mene Pangalos said: "Saphnelo is a ground-breaking first-in-class medicine and offers physicians and patients a new way of treating systemic lupus erythematosus by targeting the type I interferon receptor, which is known to play a central role in lupus disease pathophysiology. This positive recommendation from the CHMP brings us one step closer to providing a much-needed new treatment option to improve outcomes for patients in Europe."
Bodycote said it has appointed Daniel Dayan as non-executive chair with effect from 1 January. Dayan will succeed Anne Quinn who announced her intention to retire in May.
Dayan is currently chair of Swedish supply chain services and industrial materials distribution company CellMark. He has previously held positions as chair of Low & Bonar and non-executive director of Chemring Group.
Calls for a lower open for the London stocks on Monday stem from concern about the fast-spreading Omicron variant in the UK.
UK government ministers have reportedly pushed back against calls from scientific advisers for new measures to tackle Omicron before Christmas.
Confirmed cases of the faster-spreading strain have risen by more than 12,000 in the UK - and London's cases alone topped 10,000, according to the latest data on Sunday.
But around one third of the Cabinet are said to be reluctant to support new restrictions in the coming days, with Prime Minister Boris Johnson and Chancellor Rishi Sunak among them, according to The Times.
New coronavirus measures before Christmas have not been ruled out by UK Health Secretary Sajid Javid, who said there are "no guarantees" following a "sobering analysis" from scientific advisers warning about the threat from Omicron.
Javid said Omicron is "spreading rapidly" and now accounts for around 80% of infections in London and about 60% in England.
"With record Covid cases in the UK in the past few days, and new restrictions being implemented across Europe, it almost feels like an action replay of 12 months ago, with some scientists in the UK calling for a fresh lockdown before Christmas, in a move that is likely to be as welcome as toothache," commented CMC Markets analyst Michael Hewson.
"Against such a disruptive backdrop today's European market open looks set to see big falls with sentiment continuing to be fragile, against a backdrop of concerns over rising inflation and central banks whose focus has shifted towards containing inflationary pressure, and a virus that threatens to overwhelm health systems across the globe."
Further negative news for stock markets came as US Senator Joe Manchin will not back President Joe Biden's USD1.75 trillion Build Back Better spending programme, dealing a massive blow to the president and his hopes for giving an extra boost to the world's top economy.
The moderate West Virginia lawmaker's vote is crucial to getting the bill through the Senate and his decision leaves Democrats with few options to move forward.
The pound was quoted at USD1.3208 early Monday, down from USD1.3270 at the London equities close Friday.
The euro was priced at USD1.1253, down from USD1.1275. Against the Japanese yen, the dollar was trading at JPY113.34, down from JPY113.58.
Brent oil was quoted at USD71.15 a barrel Monday morning, down sharply from USD73.70 late Friday. Gold stood at USD1,799.15 an ounce, down from USD1,803.50.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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