LONDON MARKET MIDDAY: Stocks Mixed Despite Positive Vaccine News

(Alliance News) - Stocks in London were lacking direction on Wednesday midday, amid growing Covid-19 case numbers, and despite Oxford/AstraZeneca vaccine rollout optimism.

The FTSE 100 index was up 4.87 points, or 0.1%, at 6,607.52 on Wednesday. The FTSE 250 index was down 37.98 points, or 0.2%, at 20,859.61 and the AIM All-Share index was up 0.2% at 1,151.80.

The Cboe UK 100 index was up 0.1% at 658.51. The Cboe 250 was down 0.2% at 18,258.70, and the Cboe Small Companies flat at 11,753.33.

In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both flat in the afternoon.

Sterling was quoted at USD1.3600 on Wednesday, jumping from USD1.3509 at the London equities close on Tuesday and reflecting post-Brexit trade deal optimism.

The EU signed the post-Brexit deal on Wednesday, setting it on path to be provisionally implemented after UK Prime Minister Boris Johnson is scheduled to sign it for London in the afternoon.

European Commission President Ursula von der Leyen and European Council chief Charles Michel put their ink on the agreement on Wednesday morning - just a week after the deal had been struck.

The 27 EU ambassadors gave their go-ahead for the provisional application on Tuesday afternoon.

The deal - which provides for zero tariffs and zero quotas between the trading partners - still needs to be ratified by the European Parliament.

The European Commission proposed a period of provisional application until February 28, but this might be extended if the lawmakers are scheduled to give their approval in March.

Also on Wednesday, UK parliament will vote on whether to accept the deal.

The euro traded at USD1.2270, firming from USD1.2246 late Tuesday.

On the LSE, AstraZeneca said its Covid-19 vaccine has been approved for emergency supply in the UK, with the first doses being released on Wednesday so that vaccinations may begin early in the New Year.

FTSE 100-listed Astra shares were up 0.4% on Wednesday midday.

The pharmaceutical firm said it aims to supply millions of doses in the first quarter as part of an agreement with the UK government to supply up to 100 million doses in total.

The vaccine was authorised by the UK Medicines & Healthcare Products Regulatory Agency, recommending two doses administered with an interval of between four and 12 weeks. Clinical trials showed the vaccine to be safe and effective at preventing symptomatic Covid-19, with no severe cases and no hospitalisations more than 14 days after the second dose.

The first doses will be released Wednesday in order for vaccinations to start early in the new year, Astra said.

The vaccine has been approved for the immunization of people aged 18 and over, with the authorisation recommending two doses administered with an interval of four to 12 weeks.

"Key news in the UK is the Oxford/AstraZeneca vaccine authorisation, which brings forward a potential end to further restrictions given the easier logistical and storage requirements. That said, Health Secretary Matt Hancock is expected to announce additional mobility rules within the coming days as cases continue to rise," said Axi analyst Stephen Innes.

More areas in England will be placed under the country's toughest coronavirus restrictions, Health Secretary Matt Hancock is expected to tell the Commons on Wednesday.

Pressure mounted on the government to act as hospitals across England warned of increasing strains on services due to Covid-19 patient numbers, which have reached their highest levels during the pandemic, while 51,135 further cases and 414 deaths were reported on Tuesday.

Johnson chaired a meeting of the government's Covid-19 Operations committee on Tuesday evening, when changes to the tier system were discussed.

With case rates rising in all regions of England, as well as the number of Covid-19 patients in hospitals, any review is likely to involve areas moving up a tier rather than down.

Areas that may be moved from Tier 3 to Tier 4 due to increasing case rates include parts of the East Midlands, such as Northamptonshire and Leicestershire, as well as all areas of the West Midlands metropolitan county.

Hartlepool in north-east England, along with a handful of areas in Lancashire – Blackburn with Darwen, Burnley, Pendle and Ribble Valley – could also be upgraded from Tier 3 to 4.

Back on the LSE, Flutter Entertainment was up 1.2% after saying that completion of the 37% of the issued and outstanding units of FanDuel Group has occurred.

At the end of November, Flutter had entered an agreement with Fastball Holdings to acquire the latter's stake in FanDuel for USD4.18 billion, which will raise Flutter's stake in the fantasy sports, casino and horse racing business to 95% from 59%.

The buy "materially increases exposure to US market", Flutter said at the time, "the most attractive sector opportunity today".

Among the mid-caps, Energean was up 2.1% after reaching an agreement with Kerogen Investments, an affiliate of Kerogen Capital, for the acquisition of Kerogen's 30% shareholding in Energean Israel. This will result in Energean owning 100% of the Israeli business.

A total consideration of between USD380 million and USD405 million, the Mediterranean-focused gas exploration and production company said.

Energean said the acquisition adds 2P reserves of 29.5 billion cubic metres of gas and 30 million barrels of liquids, representing 219 million barrels of oil equivalent in total, to the company.

Taking a 100% interest in Energean Israel will enable Energean to fully control its capital structure, it said, enhancing its ability to maximise total shareholder returns.

Elsewhere, iEnergizer jumped 14% after entering into a credit agreement for a new five-year senior secured term loan facility for USD165 million.

The IT service management company said it intends to utilise the additional financing now available to return cash to shareholders.

Gold was quoted at USD1,880.00 an ounce on Wednesday, slightly lower than USD1,882.29 on Tuesday. Brent oil was trading at USD51.62 a barrel, up on USD51.16 late Tuesday.

The US is called for a higher start, with the Dow Jones and S&P 500 both pointed up 0.4% and the Nasdaq Composite up 0.3%.

Against the yen, the dollar was quoted at JPY103.14, down from JPY103.51.

A quiet economic calendar on Wednesday has the US goods trade balance numbers at 1330 GMT.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

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