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(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Drugmaker AstraZeneca said the UK Competition & Markets Authority has cleared its proposed acquisition of Alexion Pharmaceuticals. As a result, the acquisition is expected to close on July 21. The move follows clearance received from the European Commission on Tuesday last week, and approvals in the US, Japan and other countries. AstraZeneca is buying Boston, Massachusetts-based biotech firm Alexion in a cash-and-stock deal that was worth around USD39 billion when the acquisition was first announced back in December. The deal will "enhance the company's scientific presence in immunology", Astra said. After the acquisition is complete, a new group focusing on rare diseases will be created named Alexion, AstraZeneca Rare Disease, and will be headquartered in Boston.
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BP put a name to a pair of wind farms in the Irish Sea that the oil major will operate alongside German partner Energie Baden-Wuerttemberg. Back in February, the duo were selected as preferred bidders for two major UK offshore wind leases. In the Offshore Wind Round 4, the first UK leasing round since 2010, BP and EnBW won their bid for two leases in the Irish Sea. The leases have a combined 3 gigawatt potential generating capacity, the maximum award possible under the round's rules, plus a 60-year lease life. The projects will be named Morgan and Mona, and BP noted they have a combined capacity strong enough to power 3.4 million UK households with clean energy.
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UK housebuilder Barratt Developments reported strong demand across the country in the financial year that ended June 30. Net private reservations per active outlet per week were 0.78, up from 0.60 in financial 2020 and 0.70 in financial 2019. Completion volumes also ticked up, with 17,243 total homes completed in the recent financial year versus 12,604 homes in financial 2020 and 17,856 homes in financial 2019. Barratt said it expects pretax profit, after adjusted items of GBP107 million, to be at the top end of the range of market forecasts. Looking ahead, the company said it is well positioned for its new financial year, with total forward sales - including joint ventures - as at June 30 of 14,334 homes, up from 14,326 homes the year before and up from 11,419 homes year-on-two-years.
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MARKETS
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Stock prices ended mostly lower in Asia and were lower across Europe on Wednesday, amid concerns about rising inflation following higher-than-expected readings for June in the US and UK. Benefiting from growing anticipation of central banks responding with higher interest rates were bank shares, with Lloyds Banking and Deutsche Bank both up 1.1%.
"European markets have kicked off proceedings on a somewhat downbeat tone today, with weakness evident throughout Asian and US indices carrying through once again," said IG Senior Market Analyst Josh Mahoney. "In the UK, the continued rise of Delta variant cases provides downward pressure on stocks that should be looking forward to Monday's full reopening. Instead, airlines, cinemas, restaurants, and alike are all under heavy selling pressure as investors consider the potential ramifications of another major surge in hospitalisations." British Airways-parent IAG was down 1.6% in London.
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CAC 40: down 0.3% at 6,539.57
DAX 30: down 0.2% at 15,755.48
FTSE 100: down 0.5% at 7,087.29
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Hang Seng: closed down 0.6% at 27,787.46
Nikkei 225: closed down 0.4% at 28,608.49
S&P/ASX 200: closed up 0.3% at 7,354.70
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DJIA: called down 0.1%
S&P 500: called marginally lower, down 0.25 of a point
Nasdaq Composite: called up 0.3%
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EUR: down at USD1.1788 (USD1.1815)
GBP: up at USD1.3852 (USD1.3838)
USD: up at JPY110.49 (JPY110.33)
Gold: up at USD1,813.74 per ounce (USD1,811.70)
Oil (Brent): up at USD76.10 a barrel (USD75.50)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK consumer and producer prices jumped in June, remaining above the Bank of England's target of 2.0% for the second month in a row. The Office for National Statistics said the UK consumer price index jumped 2.5% on an annual basis in June, accelerating from 2.1% growth in May. The largest upward contribution to the 12-month inflation rate came from transport. Month-on-month, UK consumer prices rose 0.5% in June, slower than May's 0.6% rate of monthly growth. A separate release from the ONS showed UK producer price inflation also strengthened in June. Output prices grew 4.3% in the year to June, slowing from growth of 4.4% in May, while input prices jumped 9.1% on a 12-month basis, again easing from May when prices grew 10%. The UK print followed figures on Tuesday showing US consumer price inflation accelerated to 5.4% in June from 5.0% in May.
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Popular Spanish holiday islands are in danger of being moved onto the UK amber list only a fortnight after being approved for quarantine-free travel, according to reports. The Balearic islands, including tourist hotspots Ibiza, Mallorca and Menorca, could be set to be moved off the green watchlist – destinations the UK government considers safe for travel but which could potentially be downgraded to the amber list – on Wednesday due to rising cases, the reports have suggested. Those travelling to amber listed countries, such as mainland Spain, have to self-isolate for 10 days on their return to England. However, as of July 19 the requirement to quarantine will be scrapped for the fully vaccinated and those aged under 18. The Sun, which first reported the alleged travel change, quoted a source saying: "It's all still up for discussion, but the figures aren't great which is why it was on the watch list in the first place."
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UK Transport Secretary Grant Shapps has supported a decision to make masks compulsory on the London Underground, despite his own government scrapping the mandatory wearing of face coverings. Shapps said the decision was "very much in line" with what ministers wanted to happen, despite UK Prime Minister Boris Johnson's decision to lift legal restrictions in England next Monday. London Mayor Sadiq Khan said he was forced to act to make masks a condition of carriage across the capital's transport network because of the government's decision to lift restrictions. Khan said he was "not prepared" to put Tube, tram and bus users in the capital "at risk" by removing the rules on face coverings after so-called "freedom day". Under the terms of use, enforcement officers would be able to deny access or eject passengers found to be non-compliant while using the Transport for London network.
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The EU is unveiling sweeping new legislation to help meet its pledge to cut emissions of the gases that cause global warming by 55% over this decade. The measures include a controversial plan to tax foreign companies for the pollution they cause. The proposals by the European Commission, which is the EU's executive branch, will cover everything from tougher caps on car pollution to new national limits on gases from buildings. It will see a revamp of the bloc's emissions trading scheme under which companies pay for the gases they send into the air.
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Industrial production in both the euro area and the EU as a whole fell in May, figures from Eurostat showed. The seasonally adjusted industrial production fell by 1.0% in the euro area and by 0.9% in the EU in May, when compared with April. In April, industrial production rose by 0.6% in the euro area and by 0.5% in the EU month-on-month. On an annual basis, industrial production increased by 21% in both the euro area and the EU.
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Industrial production in Japan declined in May from the month before and rose at a slower pace than expected compared to a year ago. According to the Ministry of Economy, Trade & Industry, industrial output jumped by just over 21% annually in May, having risen 16% in April. According to consensus cited by FXStreet, a jump of 22% was expected for May, so the figure narrowly lagged consensus. On a monthly basis, output fell by 6.5% in May, after rising by 2.9% in April. Consensus forecasts were a fall of 5.9% in May.
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Top US Senate Democrats agreed late Tuesday on a USD3.5 trillion package to implement President Joe Biden's vast plans to fund climate initiatives, health insurance and human infrastructure programs like child care, social welfare and housing. The Democrats' aim is to turn the agreement into a budget resolution that, if it is able to clear both chambers of Congress, would allow lawmakers to enact the massive spending legislation without assistance from Republicans.
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Sydney's five million residents will be in virus lockdown for at least another two weeks, state premier Gladys Berejiklian announced, rejecting calls to tighten restrictions further. Australia's largest city is already in its third week of a partial lockdown and struggling to bring a fast-spreading outbreak of the Delta variant under control. In the past 24 hours, 97 new cases were recorded, more than the 89 reported the previous day. Sydney's lockdown was due to end on July 16, but that date has now been pushed back until July 30.
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By Tom Waite; thomaslwaite@alliancenews.com
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