LONDON MARKET CLOSE: Stocks rebound as BioNTech CEO comments reassure

(Alliance News) - Stocks in London ended sharply higher on Wednesday as concerns over the Omicron variant of Covid-19 eased somewhat after upbeat comments from a prominent immunologist.

Investors were facing a roller-coaster week as they track the mutant Omicron strain, whose emergence last Friday darkened the economic outlook, sparked fresh Covid restrictions and ravaged most markets.

However, markets took heart from comments made by BioNTech co-founder Ugur Sahin who told Reuters that the BioNTech-Pfizer Covid-19 vaccine will likely offer protection against any severe disease from the new Omicron virus variant.

The FTSE 100 closed up 109.23 points, or 1.6%, at 7,168.68. The FTSE 250 ended up 393.01 points, or 1.8%, at 22,912.73 and the AIM All-Share closed up 9.26 points, or 0.8%, at 1,196.82.

The Cboe UK 100 ended up 1.2% at 710.50, the Cboe UK 250 closed up 1.5% at 20,351.70, and the Cboe Small Companies ended up 1.2% at 14,857.70.

In Paris the CAC 40 stock index ended up 2.4%, while the DAX 40 in Frankfurt ended up 2.5%.

"There are a number of reasons for this more positive tone, one being the assurances from BioNTech founder and Chief Executive Ugur Sahin that the current vaccines will still provide a decent defence against the new variant, even if they aren't as effective. As a virology expert his comments are a good counter narrative to the slightly more alarmist tone from Moderna CEO Stephane Bancel which sent markets spinning lower yesterday," explained CMC Markets analyst Michael Hewson.

"We've also heard from a WHO official who said that new vaccines are unnecessary, and that infections so far have been mild, reinforcing the more positive narrative," Hewson added.

In the FTSE 100, travel-related stocks were back in favour with British Airways-parent International Consolidated Airlines closed up 3.4% and Premier Inn-owner Whitbread rising 3.1%. Midcap carriers Wizz Air and easyJet rose 7.0% and 4.3% respectively.

In the FTSE 250, Liontrust Asset Management ended the best performer, up 12%, after the fund manager reported a more than tripled interim profit and a sharp rise in revenue.

The London-based investment firm said pretax profits in the six months to September 30 amounted to GBP31.1 million, more than tripled from the GBP6.9 million reported in the same period a year ago.

This was on revenue of GBP114.9 million, up 66% from GBP69.1 million a year before.

As at September 30, Liontrust's assets under management and administration rose 15% over the six month period to GBP35.66 billion, lifted by GBP2.09 billion in net inflows and GBP2.64 billion from a strong investment performance.

Redde Northgate surged 11% after the commercial vehicle hire business said interim trading was ahead of expectations and full-year profit is seen "at least" in line with consensus.

Total revenue for the half-year to October 31 rose 10% to GBP612.9 million from GBP556.0 million year-on-year, and pretax profit jumped to GBP71.7 million from GBP25.9 million. Redde will pay out an interim dividend of 6.0p, up 77% on a year ago.

Drax closed up 9.3% after the power generation company tipped for earnings at the upper end of analyst consensus and put some production and sales targets up for 2030.

Selby, Yorkshire-based Drax said it expects its 2021 adjusted earnings before interest, tax, depreciation and amortisation to be in the top range of analyst expectations.

Drax, which is targeting to become a carbon negative business by 2030, has the adjusted Ebitda analyst consensus at GBP380 million with a range of GBP374 million to GBP391 million.

Last year, adjusted Ebitda from continuing and discontinued operations came in at GBP412 million, up marginally from GBP410 million in 2019. Adjusted Ebitda from continuing operations alone was GBP366 million in 2020, down from GBP371 million in 2019.

Drax continues to expect its ratio of net debt to adjusted Ebitda to return to around two-times by the end of 2022.

Elsewhere in London, Pendragon shares rallied 9.4%. The car dealer said it expects 2021 underlying pretax profit to be GBP80.0 million, up from October's guidance of GBP70.0 million. This, in turn, had been raised from a prior guidance range of GBP55.0 million to GBP60.0 million.

The pound was quoted at USD1.3315 at the London equities close, up from USD1.3245 at the close Tuesday, after robust economic data that showed the UK manufacturing sector grew at the fastest rate for three months.

The IHS Markit/Chartered Institute of Procurement & Supply purchasing managers' index rose to a three-month high of 58.1 in November, up from 57.8 in October.

The euro stood at USD1.1325 at the European equities close, advancing from USD1.1280 late Tuesday, after eurozone PMI data.

The pace of growth at factories in the eurozone showed signs of stabilising in November as firms continue to grapple with supply chain congestion.

The final eurozone manufacturing purchasing managers' index inched up to 58.4 points in November from October's 58.3. The reading remains well above the no-change mark of 50, indicating the eurozone manufacturing sector continues to expand at pace - but the final reading was below the preliminary figure of 58.6.

November's reading was the first rise in the headline index since June, IHS Markit noted. However, it marked the second-slowest expansion since February.

Against the yen, the dollar was trading at JPY113.02, down from JPY113.38 late Tuesday.

Stocks in New York were rebounding at the London equities close following steep losses on Tuesday, as investors weighed concerns over Covid-19 and Federal Reserve monetary policy.

The DJIA was up 1.4%, the S&P 500 index up 1.6% and the Nasdaq Composite up 1.4%.

Major indices fell nearly 2% on Tuesday as Federal Reserve Chair Jerome Powell acknowledged that inflation could persist longer than anticipated, and that he now advocates accelerating the drawback of the central bank's stimulus measures.

Powell's remarks came as health officials stepped up calls for Covid-19 vaccinations and booster shots in an effort to limit the spread of the Omicron variant of Covid-19.

However, investors took heart from the latest ADP payroll figures that showed employment in the US increased by more than expected last month.

Private sector employment increased by 534,000 jobs in November, beating market forecasts, cited by FXStreet, for a rise of 525,000. The pace of job creation did slow from October, however, when an increase of 570,000 was reported.

Brent oil was quoted at USD71.88 a barrel at the equities close, rebounding from USD70.75 at the close Tuesday.

Gold stood at USD1,785.55 an ounce at the London equities close, higher against USD1,776.50 late Tuesday.

The economic events calendar on Thursday has eurozone producer prices at 1000 GMT and the latest US jobless claims numbers at 1330 GMT.

The UK corporate calendar on Thursday has annual results from stockbroker AJ Bell and southern Africa-focused platinum miner Tharisa.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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