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(Alliance News) - Stocks in London ended sharply higher on Friday after US drugmaker Gilead Sciences offered a ray of hope in the fight against the coronavirus pandemic.
Early trial data shows Gilead's drug remdesivir is producing rapid recoveries in Covid-19 patients, Stat News reported on Thursday.
Remdesivir was originally developed by Gilead Sciences as a treatment for the Ebola virus disease and Marburg virus infections.
The University of Chicago Medicine study recruited 125 Covid-19 patients for Gilead's two phase 3 clinical trials, all of whom were treated daily with remdesivir. Stat News cited a recording it reviewed of University of Chicago Medicine infectious disease expert Kathleen Mullane discussing trial results with her colleagues.
Studies have found remdesivir blocks a particular enzyme that is required for viral replication. Coronaviruses replicate by copying their genetic material using an enzyme known as the RNA-dependent RNA polymerase. Rribonucleic acid polymerase is the central component of coronaviral replication.
In response, Gilead said the evidence was anecdotal and "do not provide the statistical power necessary to determine the safety and efficacy profile of remdesivir as a treatment for Covid-19". Gilead expects to report data from a controlled study in patients with severe disease by the end of April, with data from a study of patients with moderate disease coming in late May.
The Foster City, California-based firm's stock leapt 8.2% in New York on Friday.
RBC's Brian Abrahams and Gregory Renza cautioned: "There are major limitations to contextualizing and interpreting this data, and we see the Gilead-sponsored moderate study reading out next month as offering the best opportunity for a true efficacy read. We continue to see remdesivir as more impactful to Gilead's image and enabling recognition of their strong commercial portfolio and pipeline optionality, more so than a materially monetizable near-term driver."
In addition, drugmaker Roche announced it has developed a new Covid-19 test able to detect antibodies to the virus and indicate whether a person has become immune. The current tests available can only tell if a person currently has the SARS-CoV-2 virus, which causes Covid-19.
The FTSE 100 index closed up 158.53 points, or 2.8%, at 5,786.96, but ended the week down 1.4%.
The FTSE 250 ended up 480.72 points, or 3.1%, at 15,859.29, ending the week down 3.7% and the AIM All-Share closed up 15.92 points, or 2.1%, at 759.27, ending the week up 1.8%.
The Cboe UK 100 ended up 2.2% at 9,752.35, the Cboe UK 250 closed up 2.7% at 13,589.58, and the Cboe Small Companies ended up 1.4% at 8,779.76.
In Paris, the CAC 40 ended 3.4% higher, while the DAX 30 in Frankfurt closed up 3.2%.
Shore Capital analyst Vivek Raja said: "We believe that as antibody tests are rolled out globally and we become aware of best ways to treat this disease, there is a significant probability that business activity restarts and within twelve months recovers to the levels seen before the Sars-Cov2 outbreak. While we acknowledge the negative shock, we note that fiscal and monetary policy being adopted is likely to be inflationary over the medium-term.
"In particular, we would highlight that entities like the Federal Reserve are committing to policy where losses are likely to be significant in a deflationary world. Given their actions, we believe the US can and will engineer an inflationary outcome over the next twelve months. Given where interest rates and bond yields are currently, there is likely to substantial demand for equities under these conditions, over the medium-term to long-term."
On the London Stock Exchange, Flutter Entertainment ended the best performer, up 16% after the gambling firm reported a rise in revenue in its most recently ended quarter before betting shops were closed and sports events cancelled to combat the spread of Covid-19.
For the three months to the end of March, the company formerly known as Paddy Power Betfair saw revenue rise 16% year-on-year to GBP547 million from GBP478 million. Flutter said performance has deteriorated significantly since the introduction of restrictions on movement to fight the spread of Covid-19, but not as badly as first feared.
In the four weeks from March 16 to April 12, revenue for PBB Online fell by 32% year-on-year. Sports revenue declined by 57% and by 65% since the suspension of Irish racing from March 25. However, Gaming revenue increased by 15%.
Aerospace aftermarket services providers Melrose Industries, Meggitt and Rolls-Royce Holdings closed up 11%, 11% and 8.2% respectively amid signs of life in the aviation sector.
US aerospace firm Boeing's workers return to their jobs starting next week to resume building commercial planes in the Seattle area in Washington for the first time since the plant was shuttered due to the coronavirus, the company said Thursday.
Boeing said it plans a "phased" ramp-up at its facilities in Everett, Washington, which was closed in late March due to Covid-19 outbreak. The facility in the Puget Sound-region builds several commercial aircraft models including the 777 and the 737, and Boeing said about 27,000 workers will return to the operation. The manufacturer's South Carolina plant, which produces the 787 Dreamliner, remains closed.
The Dow component was up 12% in New York.
InterContinental Hotels Group closed up 11% after Barclays double upgraded the hotel operator to Overweight from Underweight.
"While we see near-term risks for the sector as the market digests what we expect to be a slow recovery over the next 12 months, we see long-term value in IHG which we consider to be the highest quality name in the sector," analyst Vikki Stern said.
At the other end of the large-cap index, Just Eat Takeaway.com ended the worst performer down 3.1% after the UK Competition & Markets Authority provisionally cleared Amazon's investment in rival Deliveroo, adding that the takeaway delivery platform needs the financial backing in order to weather the Covid-19 crisis.
Mexican gold miner Fresnillo ended the second-worst performer, down 2.8%, tracking spot gold price lower.
The precious metal was quoted at USD1,690.68 an ounce at the equities close, down from USD1,728.30 late Thursday.
"Gold had been hit by traders switch to risk-on mode. The metal tends to outperform when dealers are dumping stocks - gold is viewed as a lower-risk asset. Seeing as equity markets are driving higher, we are witnessing a fall in gold," said CMC Markets analyst David Madden.
The pound was quoted at USD1.2457 at the London equities close, marginally lower from USD1.2466 at the close Thursday, after the UK government extended the country's lockdown by three more weeks late Thursday.
The UK will face "further waves" of Covid-19 and will probably have the highest death rate in Europe because the government was "too slow" to act, a leading physician warned on Friday.
Anthony Costello, of University College London's Institute for Global Health, told a committee of members of parliament that the "harsh reality" is that "we were too slow with a number of things" and deaths could reach 40,000.
His comments came as the Department of Health said a total of 14,576 patients have died in hospital after testing positive for coronavirus in the UK as of 1700 BST on Thursday, up by 847 from the day before.
The euro stood at USD1.0838 at the European equities close, down from USD1.0868 late Thursday.
In economic news from the continent, the eurozone's inflation rate slowed sharply in March, data from Eurostat confirmed. The bloc's annual inflation rate was 0.7% in March, decelerating from 1.2% in February, confirming the earlier estimate. The figure came in line with market expectations.
On a monthly basis, inflation was 0.5% in March, unchanged from the month before.
Elsewhere, eurozone construction output fell 1.5% on a monthly basis and fell 0.9% on an annual basis in February. In January, construction output had risen 4.0% month-on-month and 6.9% year-on-year.
Against the yen, the dollar was trading at JPY107.52, firm from JPY107.31 late Thursday.
Stocks in New York were sharply higher at the London equities close following the release of broad White House guidelines for re-opening the US economy.
The DJIA was up 1.6%, the S&P 500 index up 1.5% and the Nasdaq Composite up 0.7%.
The White House outlined three "phases" under which each governor would determine the permitted size of gatherings depending on their location and levels of infection.
"Stocks are soaring today and may for a few more days as some investors believe the worst is behind us. A cure for the coronavirus is a game-changer, but that is still not in the immediate future. Trump's restarting of the American economy has the potential to be rather lengthy, as the larger cities likely remain in lockdown mode a lot longer than what happens in the Midwest," said OANDA markets analyst Edward Moya.
Brent oil was quoted at USD28.21 a barrel at the London equities close from USD27.78 at the close Thursday.
"Oil markets found baseline support from President Trump's US reopening plan," said Stephen Innes, chief global market strategist from AxiCorp.
In addition, Saudi Arabian Oil Co said it will provide 8.5 million barrels of crude oil per day from the start of May, cutting back in response to Thursday's OPEC deal.
Back in March, Saudi Arabia - the world's biggest crude exporter - announced it would increase production by at least 2.5 million barrels per day to 12.3 million barrels per day starting in April.
This came after the nation and other major producers, including Russia, failed to reach a deal in March to slash output and shore up prices amid plummeting demand in the wake of the Covid-19 pandemic.
Last weekend, OPEC and its allies struck a deal to scale back output by around 10 million barrels per day, but oil prices have not rallied as traders see it as insufficient given the magnitude of the drop in demand.
The economic events calendar on Monday has Germany producer prices at 0700 BST and eurozone trade balance figures at 1000 BST.
The UK corporate calendar on Monday has first-quarter production results from Russian gold miner Polymetal International.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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