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(Alliance News) - Stock price movement in London was restrained on Tuesday morning following a wild Monday, when Pfizer and BioNTech sent global markets soaring on positive news from their Covid-19 vaccine trial.
"Vaccine euphoria sent European stocks to eight-month highs. Wall Street surged to record highs on vaccine optimism, before closing off the highs. A calmer more questioning mood is dominating on Tuesday as European bourses are heading out of the blocks mixed as the market acknowledges that there are still many questions surrounding Pfizer's vaccine announcement," Gain Capital analyst Fiona Cincotta said.
In London, the FTSE 100 index was up 30.37 points, or 0.5%, at 6,216.66. The FTSE 250 was up 70.92 points, or 0.4%, at 18,921.15. The AIM All-Share was up 0.85 of a point at 985.25.
The Cboe UK 100 was up 0.5% at 619.35. The Cboe 250 up 0.7% at 16,185.13. The Cboe Small Companies was up 1.4% at 10,360.27.
The CAC 40 in Paris was up 0.3% but Frankfurt's DAX 30 was down 0.4%.
A vaccine jointly developed by Pfizer and BioNTech was 90% effective in preventing Covid-19 infections in ongoing Phase 3 trials, the companies announced Monday. Based on supply projections, the companies said they expect to supply up to 50 million vaccine doses globally in 2020, and up to 1.3 billion doses in 2021.
Cincotta added: "There is no doubt that the Pfizer vaccine news has altered the market's outlook on the Covid pandemic, there is now some light at the end of the tunnel and the equity indices are holding the majority of their gains. However, the blind euphoria of yesterday has been replaced with a more cautious mood, there are still plenty of questions over the vaccine's durability and distribution which need answering."
UK Prime Minister Boris Johnson said a coronavirus vaccine could start being distributed by Christmas. The UK government has ordered 40 million doses of the Pfizer vaccine - enough for about a third of the UK population. But Johnson said it would be a mistake to "slacken our resolve at such a critical moment".
Government figures show 49,238 people have died in the UK within 28 days of testing positive for Covid-19 and the number of cases has reached 1.2 million.
UK Deputy Chief Medical Officer Jonathan Van-Tam told a Downing Street press conference he was "hopeful" there would be "some vaccine by Christmas".
The pound was quoted at USD1.3208 early Tuesday, up from USD1.3131 at the London equities close Monday.
The unemployment rate in the UK rose to 4.8% for the quarter ending September 30, the National Statistics Office said Tuesday, in line with expectations.
The UK unemployment rate was 0.9 percentage point higher than a year earlier and 0.7 percentage point up from the second quarter of 2020.
For July to September 2020, an estimated 1.6 million people were unemployed, up 318,000 on a year before and up 243,000 on the previous quarter. The annual increase was the largest since December 2009 to February 2010, and the quarterly increase was the largest since March to May 2009.
Market consensus, according to FXStreet, forecast the rate at 4.8%.
The UK employment rate was estimated at 75.3%, 0.8 percentage point lower than a year earlier and 0.6 percentage pointslower than the previous quarter.
Capital Economics said the previous scaling back of the furlough scheme "took its toll".
"And with the second lockdown set to send the recovery into reverse, the unemployment rate may yet climb to about 9% next year," Capital Economics Senior UK Economist Ruth Gregory added.
Likewise, Cincotta blamed the "disappointing" data on Rishi Sunak taking too long to extend the government's furlough scheme just as it was running out.
"It seems that the last-minute extension until March was too last minute for many companies, which had already taken decisions regarding the future of their workforce and head count," she said.
In London, Land Securities was 4.9% higher, despite the commercial property developer reporting a sharp drop in interim revenue, leading to a widened pretax loss.
In the six months to September 30, Landsec's pretax loss widened to GBP835 million from GBP147 million a year before. The real estate investor recorded a valuation deficit of GBP945 million in the first half compared to GBP368 million a year before.
Revenue dropped 49% to GBP115 million from GBP225 million. Like-for-like net rental income fell 10%.
Land Securities NAV per share ended the half at 1,068p, down 9.6% from 1,182p at March 31.
Chief Executive Mark Allan said: "While today's results clearly show the impact of the pandemic on our business, Landsec remains in a fundamentally strong position. Together, the high quality of our portfolio and low leverage of our balance sheet provide a solid foundation for executing our growth strategy and creating value for all stakeholders. This strength also means we have been able to take a proactive and responsible approach to the challenges of Covid-19, supporting our communities and customers."
Allan believes Landsec is "well placed to capitalise on opportunities as they emerge", particularly in the London office market.
"The investment market for high-quality London office assets, such as those owned by Landsec, has remained robust throughout the pandemic and there is little sign of that interest waning. Access to this liquidity, coupled with the acquisition and development opportunities that are likely to arise as a result of increased obsolescence of older office stock, as well as the long-term need for urban mixed use regeneration, mean there will be ample opportunity for Landsec to create significant value," he added.
Despite Tuesday's gain, Landsec shares remain down 32% so far in 2020.
Next was 2.4% higher after Goldman Sachs upped the clothing and homewares retailer to Buy from Neutral.
Support services firm DCC was 1.8% higher after it posted a significant surge in profits for the first half of financial 2020 as it declared an increase to its dividend payout.
For the six months ended September 30, DCC posted pretax profit of GBP102.1 million, up 77% from GBP57.6 million the year prior. This was despite revenue falling 19% year-on-year to GBP5.93 billion.
By division, liquefied petroleum gas business DCC LPG sold 726,300 tonnes of product in the first half, down 9.0% on the year prior and DCC Retail & Oil sold 4.9 billion litres of product, down 18% year-on-year. DCC Technology contributed revenue of GBP1.97 billion, up 9.7% and revenue for the Healthcare division rose 25% to GBP322.90 million.
An interim dividend of 51.95p was declared, up 5.0% from 49.48p paid the year prior.
At the other end of the index of London large-caps, companies that benefited from tighter coronavirus restrictions were in the red, with online grocer Ocado down 1.7%, and online takeout platform Just Eat Takeaway down 2.7%. Ocado shed 13% on Monday and Just Eat lost 10%
In the midcaps, Cineworld and Carnival's sharp rise continued, gaining 8.3% and 6.1% - following Monday's 38% and 31% rise, respectively, for the movie house chain and cruise operator.
Oxford Instruments was sitting atop the FTSE 250, up 12%.
In the six months to September 30, pretax profit rose 6.9% year on year to GBP20.2 million, but revenue slipped 11% to GBP140.3 million.
The company designs and supplies high-technology tools and systems for use in research and industrial applications.
Chief Executive Ian Barkshire said: "We have seen strong order growth in the first half of the year with a good improvement in the order book. Orders have grown across our academic and commercial customer base, particularly for our compound semiconductor process solutions and quantum cryogenic and magnet systems.
"Covid-related customer disruption has affected installation and commissioning activities. This, along with the introduction of new covid-safe working practices across our manufacturing sites, has led to a fall in revenue over the first half."
The Japanese Nikkei 225 index closed up 0.3% on Tuesday. In China, the Shanghai Composite ended down 0.4%, while the Hang Seng index in Hong Kong advanced 1.1%.
Falling food prices dragged China's consumer inflation to an eleven-year low last month, spurred by improving supplies of pork, official data showed Tuesday.
The cost of pork - a staple meat in the world's second-largest economy - has been edging down after rocketing last year when an African swine fever outbreak ravaged pig stocks. Authorities have been struggling to recover supplies since.
The country's consumer price index, a key gauge of retail inflation, rose 0.5% from a year ago, a slower pace than expected, according to National Bureau of Statistics data.
This marked the third straight month of slower growth, and the lowest headline inflation since October 2009.
But Nomura chief China economist Lu Ting told AFP: "The falling CPI inflation does not mean China is experiencing disinflation or deflation, as the drop has been mainly driven by pork prices."
"Excluding pork, China's CPI inflation actually bottomed out in July at 0.4% and remained at 0.7%," he added.
The dollar was lower early Tuesday in London. The euro was priced a USD1.1840, firm from USD1.1815. Against the yen, the dollar was quoted at JPY105.07, down from JPY105.57.
Brent oil was trading at USD42.78 a barrel Tuesday morning, up from USD42.46 on Monday evening. Gold was quoted at USD1,888.80 an ounce, higher than USD1,853.81.
By Paul McGowan; paulmcgowan@alliancenews.com
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