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(Alliance News) - Sterling was tumbling on Wednesday afternoon as the UK's vaccine rollout was set for a potential delay following blood clot concerns with AstraZeneca's vaccine.
"Much like on Tuesday, pronounced losses for the pound helped the FTSE top the table of the session's highflyers," SpreadEx analyst Connor Campbell said.
The FTSE 100 index added 61.77 points, or 0.9%, at 6,885.32. The mid-cap FTSE 250 closed up 166.09 points or 0.8%, at 22,160.57, having crossed the 22,000 mark for the first time in morning trade. The AIM All-Share index ended up 0.5% at 1,229.86.
The Cboe UK 100 index closed up 1.0% at 686.72. The Cboe 250 ended up 0.8% at 19,815.58. The Cboe Small Companies gained 0.1% at 14,112.90.
Campbell continued: "It appears that while the UK blue chip index, and its mid-cap sibling, enjoy the optimism surrounding the country's post-covid comeback, sterling has been saddled with concerns over the vaccine programme."
The pound was quoted at USD1.3747 at the close on 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.
CMC Markets Chief Market Analyst Michael Hewson said: "The pound has taken an absolute battering today, predominantly as a result of a squeeze on euro short positions, with some suggesting that all the negativity around the AstraZeneca vaccine is weighing on the currency. It is being suggested that these problems might raise the prospect of a delay in the timetable to a full reopening of the UK economy. This seems highly dubious given that the Moderna rollout starts today, which should offset any potential delay with respect to the Astra shot."
The benefits of the Oxford-AstraZeneca vaccine continue to outweigh any risks for most people, the UK medicines watchdog has said, as European regulators ruled that unusual blood clots were "very rare side effects" of the jab.
A review by the European Medicines Agency's safety committee concluded on Wednesday that "unusual blood clots with low blood platelets should be listed as very rare side effects" of the Oxford/AstraZeneca vaccine.
Emer Cooke, executive director of EMA, said its review "confirmed that the benefits of the AstraZeneca vaccine in preventing Covid-19 overall outweigh the risk of side effects," adding: "Vaccination is extremely important in helping us in the fight against Covid-19."
In the UK, the Medicines & Healthcare products Regulatory Agency said there were still huge benefits of the vaccine in preventing Covid-19 and serious disease.
However, due to a very small number of blood clots in younger people, those under the age of 30 will be offered Pfizer or Moderna instead.
UK Prime Minister Boris Johnson said the government believes the Oxford/AstraZeneca vaccine is "safe", telling reporters on a visit to Cornwall: "But the crucial thing for everybody is to listen to what the scientists, the medical experts have to say later on today."
Astra closed 1.2 lower%
CMC's Hewson said: "Today's best performers have been broad based with Just Eat Takeaway the best performer, though it's not immediately clear why, while Deliveroo has enjoyed a welcome boost as unconditional trading got underway, shrugging off the news that their UK riders have voted for strike action."
Just Eat Takeaway ended 5.1% higher, while peer Deliveroo added 2.1%.
Ryanair Holdings gained 0.2%. 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.
Royal Dutch Shell 'A' and 'B' shares advanced 1.0% and 1.7%, 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 gained 1.9%. 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.
Carnival advanced 5.4% as it optimised its spend as its quarterly loss widened, while bookings have improved.
The cruise operator reported a US GAAP net loss of USD1.97 billion for the three months to the end of February, widened from a USD781 million loss reported in the first quarter of the prior year.
Gains on ship sales and impairments totalled USD3 million, down from USD928 million a year ago. As a result, adjusted net loss for the first quarter was USD1.95 billion versus USD150 million profit the year prior.
The Florida-based firm noted that it ended the first quarter with USD11.5 billion of cash and short-term investments. Cash burn rate in the first quarter was better than expected, Carnival noted, as the company has identified and implemented opportunities to optimise its monthly spend.
Carnival said its booking volumes for all future cruises during the first quarter were 90% higher than booking volumes during the prior quarter. Cumulative advanced bookings for 2022 were also ahead of a very strong 2019, despite "minimal" advertising or marketing.
Saga, which provides insurance and travel to people over 50, said it is seeing pent-up demand for cruises and is ready for its ships to leave dock as soon as governments allow.
As a result the firm jumped 11%.
Saga reported a GBP61.2 million pretax loss in the financial year that ended January 31, narrowed from a GBP300.9 million loss the year before. However, on an underlying basis, profit fell by 84% to GBP17.1 million from GBP109.9 million, amid Covid-19 restrictions. Revenue fell by 58% to GBP337.6 million from GBP797.3 million.
The company said its statutory pretax loss included a GBP59.8 million impairment of goodwill in its Travel division in the first half of the year, as the virus pandemic halted travel.
Saga said it is ready to resume tour and cruise operations as soon as allowed. "Customer demand remains strong, with evidence of significant pent-up demand from customers ready to travel," it said. Total cruise bookings are GBP154 million for financial 2022 and 2023 combined, up 20% from GBP128 million at the same point last year.
In mainland Europe, the CAC 40 index in Paris was up 0.1% but the DAX 30 in Frankfurt was down 0.1%.
The euro was priced at USD1.1891, up from USD1.1843. Against the yen, the dollar was trading at JPY109.72, lower from JPY109.83.
In the US, Wall Street was searching for direction ahead of the minutes, due at 1900 BST, from the Federal Reserve's most recent policy meeting. The Dow Jones Industrial Average was down 0.1%, the S&P 500 flat and the Nasdaq Composite down 0.1%.
Brent oil was quoted at USD62.08 a barrel on Wednesday evening, down from USD63.42 late Tuesday in London.
CMC's Hewson said: "Having hit a two-week high earlier this week gold prices have slipped back a touch, however given the current weakness in US 10 year yields, the downside looks somewhat limited. This could, of course change if tonight's Fed minutes show any hint of hawkishness."
Gold was trading at USD1,739.40 an ounce, lower against USD1,744.00.
In Thursday's international economic calendar, there is a German factory orders print at 0700 BST, French trade balance at 0745 BST, with UK Markit construction PMI at 0930 BST and eurozone producer price index at 1000 BST.
In the UK corporate calendar, online retailer ASOS will release half-year results, miner Ferrexpo will publish first quarter production figures and asset manager Premier Miton will issue a trading statement.
By Paul McGowan; paulmcgowan@alliancenews.com
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