(Alliance News) - Stock prices in London were continuing to march higher at midday on Wednesday with investors hailing the IMF's forecast for UK growth, as Moderna's vaccine became the third jab to be used in the country's fight against Covid-19.
The IMF on Tuesday endorsed the view of a strong global economic rebound by hiking its 2021 growth forecast for the second time in three months, predicting a 6.0% expansion, from its 5.5% prior estimate. Further, the IMF said it expected UK growth to be over 5% this year and in 2022, pointing to the successful vaccine rollout.
The FTSE 100 index was up 51.45 points, or 0.8%, at 6,875.00. The mid-cap FTSE 250 was up 113.67 points or 0.7%, at 22,108.15, having crossed the 22,000 mark for the first time in morning trade. The AIM All-Share index was up 0.3% at 1,227.66.
The Cboe UK 100 index was up 0.7% at 684.80. The Cboe 250 was up 0.6% at 19,775.30. The Cboe Small Companies was down 0.3% at 14,098.39.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt both were up 0.1%.
Analysts at Oanda commented: "The prospect of a faster global economic recovery and news that the European Covid vaccine programme is expected to ramp up rapidly over the coming weeks boosted risk sentiment.
"Today the FTSE is the clear outperformer thanks to a vote of confidence from the IMF, a softer pound and rising commodity stocks."
In the FTSE 100, Royal Dutch Shell 'A' and 'B' shares were up 0.6% and 0.7% respectively. The oil major said earnings from its core Upstream division are expected to be positive in the first quarter, boosted by the current commodity price environment, but the Texas freeze will hit the result by up to USD40 million.
Upstream production is expected to be between 2.40 million and 2.48 million barrels of oil equivalent per day, including 10,000 to 20,000 barrels per day lower production due to the Texas storm.
Shell had posted an adjusted loss in Upstream of USD2.85 billion for 2020 versus earnings of USD4.45 billion in 2019.
Peer BP was up 2.5%. The UK oil major had said on Tuesday that it hit its USD35 billion net debt target during the first quarter of 2021, due to the early delivery of disposal proceeds and a positive operating performance, paving the way for share buybacks.
At the other end of the large-caps, Flutter Entertainment was still the worst performer, down 1.7%, with the gambling firm embroiled in litigation issues with Rupert Murdoch's Fox Corp.
Fox late Tuesday said it filed a lawsuit against Flutter, the owner of US sports betting site FanDuel, over a disputed 18.6% option in FanDuel.
Fox wants to acquire an 18.6% stake in FanDuel at an USD11.2 billion valuation - the value set when Flutter acquired a 37.2% stake in FanDuel from Fastball in December.
CNBC reported late Tuesday that Flutter has argued Fox must pay fair market value to exercise the option in July. The price could be determined by a FanDuel initial public offering, which Flutter is considering.
Flutter, which merged its US operations with FanDuel in 2018, had raised its FanDuel holding to 95% in December in a USD4.18 billion deal. Flutter had enlisted Fox's to facilitate the deal, giving it the option to buy 18.6% of FanDuel in July this year.
In response, Flutter said "Fox's position that it has a right to acquire an 18.6% interest in FanDuel based on an USD11.2 billion valuation is incorrect. It would represent a windfall to Fox compared to the fair market valuation as of July 2021, to which the parties had previously agreed."
Flutter said it will not allow Fox's filing, "which is without merit, to distract from its business and will vigorously defend its position in the arbitration".
AstraZeneca shares were 0.8% lower.
The trial of the Oxford University and AstraZeneca vaccine in children has been paused while regulators investigate reports of a rare form of blood clot among adults. Oxford said that no safety concerns have arisen from the trial itself, but it is waiting for more information from the Medicines & Healthcare products Regulatory Agency before giving any more vaccinations. Regulatory bodies from the UK, Europe and the World Health Organisation are assessing data on the jab and a potential association with a rare form of blood clot.
The European Medicines Agency will hold a press conference on its findings over possible links between AstraZeneca's coronavirus vaccine and blood clots at 1500 BST on Wednesday.
"EMA is holding a virtual press briefing on the conclusion of the evaluation of a safety signal with Vaxzevria (formerly Covid-19 Vaccine AstraZeneca) relating to cases of thromboembolic events by EMA's safety committee," it said.
A senior EMA official was quoted in Italian media on Tuesday as saying that there was a "clear" connection between the AstraZeneca jab and clots, and that the agency would announce it soon.
In the FTSE 250, Hilton Food Group was up 2.0% after the food packing company boosted its dividend as it reported profit growth for 2020, driven by Australia.
Revenue for the 53 weeks to January 3, 2021, came in at GBP2.77 billion, up a sharp 53% from GBP1.81 billion for the 52 weeks to December 29, 2019. Pretax profit rose by a quarter to GBP54.0 million from GBP43.2 million.
On the back of this strong performance, Hilton Food's total dividend for the year was raised to 26.0p from 21.4p.
Elsewhere, Ryanair Holdings was up 1.1%. The Irish carrier said it expects to report a pre-exceptional net loss of between EUR800 million and EUR850 million for the financial year that ended March 31, narrowed from the previously guided range of EUR850 million to EUR950 million.
Easter travel restrictions and lockdowns alongside a delayed traffic recovery into the peak summer 2021 season, due to the slow rollout in the EU of Covid-19 vaccines, means that 2022 traffic is likely to be towards the lower end of the previously guided range of 80 million to 120 million passengers, Ryanair noted.
"While it is not possible (at this time) to provide meaningful 2022 profit guidance, we do not share the recent optimism of certain analysts as we believe that the outcome for 2022 is currently close to breakeven," Ryanair said.
The company said its balance sheet remains strong, with year-end net cash of EUR3.15 billion and 84% of its owned fleet of 420 Boeing 737 jets unencumbered.
The pound was quoted at USD1.3821 at midday Wednesday, down from USD1.3848 at the London equities close on Tuesday, but recovering from an intraday low of USD1.3717 after positive PMI data.
UK services sector activity accelerated in March as providers pointed to the reopening of the domestic economy, the latest figures from IHS Markit showed.
The IHS Markit-CIPS UK services purchasing managers' index reading was revised a touch lower to 56.3 points in March from a preliminary estimate of 56.8, but was higher compared to February's final 49.5.
Markit said UK service providers reported a strong rebound in business conditions during March, with activity, new orders and employment all picking up since the previous month.
The seasonally adjusted UK composite output index registered 56.4 points, up from 49.6 in February and above the neutral 50.0 threshold for the first time in 2021.
The euro was priced at USD1.1890, up from USD1.1843. Against the yen, the dollar was trading at JPY109.79, marginally lower from JPY109.83.
In economic news from the continent, a strong month for manufacturing helped the eurozone's private sector return to growth in March, PMI results from IHS Markit showed.
The services sector remained in decline, though survey results suggested the pace of contraction eased in March. The services business activity index rose to 49.6 points in March, topping both February's 45.7 points and the early flash estimate of 48.8 points.
"Germany and Ireland both recorded higher levels of service sector activity during March. All other nations recorded declines although rates of contraction were modest, and noticeably slower in France and Spain," IHS Markit said.
The composite figure, which is calculated using both the services and manufacturing tallies, posted better-than-expected growth in March.
The composite index improved to 53.2 points, from February's 48.8 points. The final figure for March also topped the 52.5 points flash estimate.
Brent oil was quoted at USD63.23 a barrel on Wednesday at midday, down from USD63.42 late Tuesday in London. Gold was trading at USD1,736.00 an ounce, lower against USD1,744.00.
US stock market futures were pointed to a slightly higher open ahead of the minutes, due at 1900 BST, from the Federal Reserve's most recent policy meeting.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all called up 0.1%.
Moderna shares were up 0.8% in pre-market trade as an unpaid carer became the first person in the UK to receive the biotechnology company's Covid-19 vaccine. Elle Taylor, from Ammanford, got the jab at the West Wales General Hospital in Carmarthen.
The UK has bought 17 million doses of Moderná vaccine - enough for 8.5 million people. Health Secretary Matt Hancock said he was "delighted we can start the UK rollout of the Moderna vaccine in west Wales today".
Amazon.com shares were flat in pre-market trade. The e-commerce company said Tuesday it supports US President Joe Biden's proposal for a corporate tax increase to fund infrastructure improvements, saying it should be part of a "balanced solution that maintains or enhances US competitiveness."
Chief Executive Jeff Bezos made the comment in a statement days after Biden singled out the Seattle, Washington-based firm for avoiding income taxes as he proposed to boost the corporate tax rate to 28%.
"We support the Biden administration's focus on making bold investments in American infrastructure," Bezos said. "We recognize this investment will require concessions from all sides – both on the specifics of what's included as well as how it gets paid for (we're supportive of a rise in the corporate tax rate)."
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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