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(Alliance News) - Stocks in London are set to open higher on Thursday as markets await an announcement that the UK and EU have reached agreement on a post-Brexit trade deal.
UK financial markets will close at 1230 GMT on Thursday for Christmas Eve. Markets in both France and the US also close early on Thursday, while markets in Germany are shut entirely.
In early UK company news, Network International said it remains confident despite claims made by short seller ShadowFall Research. BHP said Samarco Mineracao has met the licensing requirements to restart operations at its Germano mine complex in Brazil.
IG says futures indicate the FTSE 100 index of large-caps to open up 27.35 points, or 0.4%, at 6,523.10 on Thursday. The FTSE 100 closed up 42.59 points, or 0.7%, at 6,495.75 on Wednesday.
"Financial markets picked themselves up and dusted themselves of overnight, after a torrid week. Sentiment improved after headlines started appearing that the UK and EU have finally reached a provisional Brexit trade agreement," said Jeffrey Halley, senior market analyst at Oanda.
An announcement of a UK-EU post-Brexit trade trade is expected on Christmas Eve. Talks were continuing through the night on the details of an agreement.
The development came as Britain and the EU were believed to have made progress on resolving issues including fishing rights and the "level playing field" measures aimed at preventing unfair competition. The expected deal comes with just days left before the current trading arrangements expire on December 31.
UK Prime Minister Boris Johnson led a late-night call with Cabinet ministers to update them on the situation.
Sterling was quoted at USD1.3561 early Thursday, higher than USD1.3525 at the London equities close on Wednesday and approaching last week's highs above USD1.36.
"Sterling's recent high at 1.3625 remains its initial target, and GBP/USD should be set for further gains to 1.3800 if the Brexit Christmas Carol plays out as expected. Further gains from there will depend on the agreement's actual nuts and bolts and its interpretation by markets. Given the thin liquidity conditions over the holiday season, a move above 1.4000 cannot be ruled out," said Oanda's Halley.
The euro traded at USD1.2204 early Thursday, rising from USD1.2195 late Wednesday.
On the virus front, millions more people will be under the toughest coronavirus restrictions from Boxing Day, as the UK also implemented a travel ban on South Africa, amid concerns over another new strain of Covid-19.
Health Secretary Matt Hancock warned the "highly concerning" new variant is believed to be more transmissible than the mutant strain that resulted in the creation of the new Tier 4 restrictions.
It comes as more than 40% of England's population are settling in for lockdown conditions from Boxing Day, after a further six million people were placed under Tier 4 restrictions, with areas such as Sussex, Norfolk and Cambridgeshire set to move to the toughest restrictions.
In a quiet day for UK company news ahead of a four-day holiday, Network International noted a recent reported by short seller ShadowFall Research.
"We take any critique of the company seriously. While we believe many of the issues raised have already been addressed, the historical nature of certain statements in the report means that a full response will take some time," said Network International, adding it expects to publish a response by the end of January.
The FTSE 250-listed payment solutions provider said it remains confident in its strategy and the long-term fundamentals of its markets.
ShadowFall, in a report on Wednesday stating it was short Network International shares, alleged that the firm "pulled on many strings to present as good numbers as it could" ahead of its IPO in 2019, and claimed there is a "rising risk" of debt covenant breach.
BHP Group said Samarco Mineracao has met the licensing requirements to restart operations at its Germano mine complex in Minas Gerais and its Ubu complex in Espirito Santo, Brazil.
BHP Billiton Brasil and Vale each hold a 50% interest in Samarco. Samarco's operations were suspended following the catastrophic failure of the Fundao tailings dam in November 2015.
The dam collapse in the city of Mariana had resulted in 19 deaths and forced hundreds from their homes. Considered the worst environmental disaster in Brazilian history, it left 250,000 people without drinking water and killed thousands of fish. An estimated 60 million cubic meters of waste flooded rivers and eventually flowed into the Atlantic Ocean.
Allied Minds said portfolio company Orbital Sidekick has conditionally secured USD16.0 million in a Series A Preferred financing round led by Singapore-based investment firm Temasek.
Allied Minds committed USD2.5 million in the funding round, with participants also including new investors.
"Proceeds from this financing will allow Orbital Sidekick to focus on scaling its business and growing its sales pipeline to more rapidly bring its products to market and enable it to launch two additional advanced hyperspectral imaging satellites to support its customers," said Allied Minds.
SDCL Energy Efficiency Income Trust has agreed to buy a series of portfolios of US commercial and industrial solar and energy storage projects, together with a 50% interest in the platform that has created them, for USD150 million.
SDCL Energy Efficiency will buy four portfolios totalling over 175 megawatts and a 50% interest in Onyx Renewable Partners and its follow-on pipeline from funds managed by Blackstone. Blackstone will retain a 50% stake in Onyx.
"The Onyx projects are well aligned to SEEIT's investment policy as they increase the supply of renewable energy generated on-site and help to reduce greenhouse gas emissions arising from the supply, distribution and consumption of energy," the company said.
Yourgene Health said it has been added to the UK government's approved Covid-19 private testing providers list for the Test to Release scheme for international arrivals to the UK, and also for general testing.
The company added that it has conducted in silico analysis studies into the new coronavirus strain, with results showing the performance of its test should be unaffected.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.4%, the S&P 500 up 0.1% and Nasdaq Composite closing 0.3% lower. The New York market closes at 1 pm local time on Thursday, 1800 GMT.
In Asia on Thursday, the Japanese Nikkei 225 index closed up 0.5%. Against the yen, the dollar was quoted at JPY103.56 versus JPY103.55.
In China, the Shanghai Composite closed down 0.6%, while the Hang Seng index in Hong Kong is up 0.2%. The S&P/ASX 200 in Sydney closed up 0.3%.
Gold was quoted at USD1,875.70 an ounce early Thursday, higher than USD1,872.05 on Wednesday. Brent oil was trading at USD51.29 a barrel, up from USD51.03 late Wednesday.
By Lucy Heming; lucyheming@alliancenews.com
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