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(Alliance News) - Stock prices in London are seen opening higher on Wednesday amid optimism over more US fiscal stimulus and strong tech earnings.
In early company news, UK drugmaker GlaxoSmithKline joined the fight against the coronavirus pandemic. Plumbing and heating products supplier Ferguson updated the market over its US listing, and telecommunications provider Vodafone said its Vantage Towers initial public offering remains on track.
IG futures indicate the FTSE 100 index is to open 27.55 points higher at 6,544.20. The large-cap index closed up 50.23 points or 0.8%, at 6,516.65 on Tuesday.
GlaxoSmithKline and German biopharmaceutical company CureVac announced a new EUR150 million collaboration to jointly develop next-generation mRNA vaccines for Covid-19, with the potential for a "multi-valent approach" to address multiple emerging variants in one vaccine.
Already approved vaccines from Pfizer and Moderna use the same mRNA technology that give instructions for the body's cells to make a harmless piece of "spike proteins". The spike protein is found on the surface of the virus that causes Covid-19. This in turn makes the body trigger an immune response, offering immunity against any potential future infections. However, Pfizer and Moderna's jabs have to be administered in two doses.
Under the terms of the collaboration agreement, Glaxo will have exclusive rights to develop, manufacture, and commercialise the vaccine in all countries with the exception of Germany, Austria and Switzerland. It also will be the marketing authorisation holder for all countries other than Switzerland. Glaxo will make an upfront payment to CureVac of EUR75 million and a further milestone payment of EUR75 million, conditional on the achievement of specific milestones.
Further, Glaxo will also support the manufacture of up to 100 million doses of CureVac's first generation Covid-19 vaccine candidate CVnCoV in 2021.
The pair will contribute resources and expertise to research, develop, and manufacture a number of novel mRNA vaccine candidates, including multi-valent and monovalent approaches. Glaxo said the aim is to offer broader protection against a variety of different SARS-CoV2 variants, and to enable a quick response to new variants potentially emerging in the future.
The development programme will begin immediately, with the target of introducing the vaccine in 2022, subject to regulatory approval, Glaxo noted.
GlaxoSmithKline will report annual results at midday on Wednesday.
Ferguson said it is in the process of registering with the US Securities & Exchange Commission to enable trading of its ordinary shares in the US.
Ferguson anticipates that the additional US listing will become effective in early March and confirmed that it has applied to list its ordinary shares on the New York Stock Exchange. In addition, Ferguson will retain its premium listing on the London Stock Exchange and inclusion in the FTSE 100 index.
As a result of the additional US Listing, Ferguson's current american depositary receipt scheme managed by JPMorgan Chase Bank will be terminated.
Vodafone Group reported a fall in third-quarter revenue and said its Vantage Towers IPO remains on track.
For the third quarter ended December 31, total revenue was down 4.7% to EUR11.20 billion from EUR11.75 billion in the third quarter of 2019. Service revenue was down 3.9% to EUR9.36 billion from EUR9.73 billion. Vodafone said service revenue rose 0.4% on an organic basis.
Vodafone reaffirmed its financial 2021 guidance with adjusted earnings before interest, tax, depreciation and amortisation expected to be between EUR14.4 billion to EUR14.6 billion and free cash flow of at least EUR5 billion.
In fixed broadband, Vodafone said there has been strong demand for high-speed connectivity, with over 1.1 million next-generation network broadband customers added in Europe year-to-date, taking its total NGN broadband base to 22.6 million.
"I am pleased the group returned to service revenue growth in Q3 as a result of the continued commercial momentum across our business, including our largest market Germany. Our good trading performance underscores our confidence in the outlook for the full year. We have made further progress on our strategic priorities, including the IPO of Vantage Towers in early 2021, which remains firmly on track and will now include our 50% shareholding in the UK towers joint venture with Telefonica," said Chief Executive Officer Nick Read.
Global market sentiment was lifted on Wednesday as the US Senate took a tentative step Tuesday towards pushing through a massive economic aid package proposed by President Joe Biden, but bipartisanship was absent.
Besides USD1,400 stimulus checks, Biden's proposal would pay for programs to help schools safely reopen, accelerate Covid-19 testing and vaccine distribution, financially support small businesses, extend unemployment benefits through September, and increase food aid for those in need.
The Senate voted 50 to 49 in a straight party-line decision to begin the budget reconciliation process (one Republican did not vote). That procedural move opens the door for Democrats to push through the Covid-19 rescue package on their own, avoiding the filibuster that requires 60 votes for most legislation.
Democratic Senate majority leader Chuck Schumer said a "big bold package" is needed to avoid the long, drawn out recovery experienced in the aftermath of the 2008 global financial crisis.
"European markets are likely to open higher again, despite pan-Europe services PMI data that will inevitably be on the weaker side, and signs of rising inflation. Until they aren't, the US stimulus and global recovery themes are back in the driver's seat," said Oanda Markets analyst Jeffery Halley.
The Japanese Nikkei 225 index closed up 1.0%. In China, the Shanghai Composite ended down 0.5%, while the Hang Seng index in Hong Kong was 0.2% lower. The S&P/ASX 200 in Sydney closed up 0.9%.
Growth in China's service sector slowed in January as the amount of new work rose at the softest rate since August, mirroring the country's manufacturing sector, data from Caixin showed.
The headline seasonally adjusted business activity index fell to 52.0 index points in January from 56.3 points in December, reflecting a further loss of momentum since November, though still indicating growth. Total new work for the month rose, albeit at the slowest rate since August due to a weaker increase in export sales, in spite of recovering customer demand and new client wins.
In the US on Tuesday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 1.6%, S&P 500 up 1.4% and Nasdaq Composite up 1.6%.
Amazon.com after the New York market close reported considerably higher fourth quarter sales, with strong contributions from both product and services. The online retailer also announced that Andy Jassy will be taking over as chief executive, with founder Jeff Bezos transitioning to executive chair. Jassy will take over as CEO in the third quarter of 2021.
The Seattle, Washington-headquartered company posted total net sales of USD125.56 billion for the three months ended December 31, a sharp 44% jump from USD87.44 billion in the same quarter of 2019. This helped boost Amazon's quarterly pretax income to USD7.77 billion from USD4.05 billion.
Alphabet reported strong income growth in the fourth quarter, driven by Search and YouTube revenue. In the three months to December 31, the Google parent recorded net income of USD15.23 billion, up from the USD10.67 billion reported the year before. Diluted earnings per share rose to USD22.30 from USD15.35.
The pound was quoted at USD1.3655 on Wednesday morning, higher from USD1.3644 at the London equities close Tuesday.
The euro stood at USD1.2032, flat from USD1.2029. Against the yen, the dollar was trading at JPY105.07, little changed from JPY105.05.
Brent oil was quoted at USD57.83 a barrel Wednesday morning, up from USD57.58 at the London market close Tuesday. Gold was trading at USD1,839.65 an ounce, a touch higher from USD1,837.20 late Tuesday.
In the economics calendar on Wednesday, there are French, German, eurozone and UK service PMI readings at 0850 GMT, 0855 GMT, 0900 GMT and 0930 GMT, respectively. In the afternoon, the US service PMI print is at 1445 GMT. Elsewhere, the eurozone consumer and producer price index is due at 1000 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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