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(Alliance News) - Stocks in London opened lower on Friday amid fears over lockdown restrictions in the UK and Europe and confusion over the test results of AstraZeneca's coronavirus vaccine, while JD Wetherspoon shares fell as it bemoaned the UK government's post-lockdown tier system.
Under new post-lockdown rules set out by the UK government on Thursday, more than 55 million people will be placed into Tier 2 and Tier 3 measures when the second national lockdown ends next week, meaning mixing between households indoors will effectively be banned for the vast majority of the country.
The FTSE 100 index was down 35.04 points, or 0.2%, at 6,327.89. The large cap index is up 9.4% so far in November, however.
The mid-cap FTSE 250 index was down 30.54 points, or 0.2%, at 19,365.80. The AIM All-Share index was flat at 1,037.81.
The Cboe UK 100 index was down 0.6% at 630.51. The Cboe 250 was down 0.3% at 16,896.62. The Cboe Small Companies up 0.2% at 11,464.50.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.1% and 0.2% respectively.
"This end-of-week caution appears to be predicated on concern over the short-term economic outlook, as the extension of tighter restrictions on economic activity in France, Germany and the UK creates further uncertainty over the potential for permanent economic scarring as we head into 2021. The vaccine story is undoubtedly good news, however, there is some concern as to what the economic landscape will look like when we come out of the other side of winter," said CMC Markets analyst Michael Hewson.
In the FTSE 100, Diageo was the best blue-chip performer, up 1.7%, after Morgan Stanley upgraded the distiller to Overweight from Equal Weight.
In the FTSE 250, Capita was the best performer, up 2.7%, after the outsourcer said it was in talks with private equity firm Montagu over a possible sale of its Education Software Solutions unit, as it seeks to reduce debt.
At the other end of the midcaps, JD Wetherspoon was down 3.5%. The pub chain complained bitterly about the UK government's post-lockdown tier system, which effectively forces almost half of its about 870 pubs to close.
Just 13 Wetherspoon pubs in England are in areas classified as Tier 1, under the new UK virus restrictions that go into place from next week. In addition, there are 51 pubs in Wales, where the regulations equate to Tier 1 in England.
In Tier 1, the rule of six applies indoors and outdoors, but in Tier 2 there will be a ban on households mixing indoors, and pubs and restaurants will only be able to sell alcohol with a "substantial meal". Tier 3 measures mean a ban on households mixing, except in limited circumstances such as in parks.
For Wetherspoon, Tier 2 affects 435 pubs. This tier includes 17 pubs in Scotland where the regulations approximate to Tier 2 in England, the pub chain said.
"These rules greatly reduced pub capacity and provided strict social distancing and hygiene standards but, with difficultly, allowed pubs to trade viably. It is very disappointing that yet another raft of regulations has been introduced, which has effectively closed half our pubs," said Chair Tim Martin.
Marks & Spencer was down 3.0% after Goldman Sachs downgraded the food, clothing and homeware retailer to Neural from Buy.
The AstraZeneca and Oxford University vaccine will undergo a new global trial as critics questioned the claim that it could protect up to 90% of people against coronavirus.
Mene Pangalos, AstraZeneca's head of biopharmaceuticals R&D, confirmed that the low-dose trial included nobody over the age of 55.
The UK government said on Friday it has asked its independent medicines regulator to assess AstraZeneca's coronavirus vaccine as part of the formal approval process for the drug to be rolled out by the end of the year.
More than 1.4 million people have died since the novel coronavirus emerged in China late last year, and three drug developers - Pfizer/BioNTech, Moderna and AstraZeneca/Oxford University - are currently applying for approval for their vaccines to be used as early as December.
But under British rules, the government must also ask the independent Medicines & Healthcare products Regulatory Agency to green light the drug.
"We have formally asked the regulator to assess the Oxford/AstraZeneca vaccine, to understand the data and determine whether it meets rigorous safety standards," said UK Health Secretary Matt Hancock.
The UK government has already formally asked the MHRA to assess the Pfizer/BioNTech vaccine for its suitability.
"After a string of positive vaccine news, AstraZeneca yesterday admitted that it made a mistake in one of its trials. AstraZeneca is likely to conduct an additional global trial to assess the efficacy of its Covid-19 vaccine. The company's CEO said he did not expect the additional trial to hold up regulatory approvals in the UK and the European Union. Clearance from the US Food and Drug Administration may take longer because the regulator is unlikely to approve the vaccine on the basis of studies conducted elsewhere, especially given the questions about the results," said analysts at Danske Bank.
The dollar was lower against major counterparts.
The pound was quoted at USD1.3378 on Friday morning, higher from USD1.3333 at the London equities close Thursday. The euro stood at USD1.1930, up from USD1.1908. Against the Japanese yen, the dollar was trading at JPY104.05, down from JPY104.27.
Brent oil was trading at USD47.50 a barrel Friday morning, lower from USD47.77 late Thursday. Gold fetched USD1,809.21 an ounce, slightly lower from USD1,810.32.
The Japanese Nikkei 225 index ended up 0.4%. In China, the Shanghai Composite ended up 1.1%, while the Hang Seng index in Hong Kong closed up 0.4%.
Financial markets in the US will reopen for a half-day on Friday after being closed on Thursday for Thanksgiving. Wall Street closes at 1 pm local time, 1800 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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