LONDON MARKET OPEN: Flutter Entertainment Rises After Lifting Guidance

(Alliance News) - Stock prices in London opened higher on Wednesday as the positive momentum from a successful vaccine trial continued, while Flutter Entertainment was in demand after raising annual guidance.

US pharma company Pfizer and Germany's BioNTech provided a much-needed boost on Monday when they said their candidate for a Covid-19 vaccine had been 90% effective, raising hopes for a return to a semblance of normality in the world.

The US on Tuesday registered a record 200,000 new Covid-19 cases in one day. The vaccine news brought some relief from an otherwise grim picture, with tighter restrictions imposed in Europe and the Middle East, and a surge in the US claiming 1,535 lives in 24 hours.

In London, the FTSE 100 index was up 36.33 points, or 0.6%, at 6,333.18. The FTSE 250 was up 152.22 points, or 0.8%, at 19,180.56. The AIM All-Share was up 0.1% at 986.14.

The Cboe UK 100 index was up 0.4% at 630.08. The Cboe 250 was up 0.7% at 16,424.22. The Cboe Small Companies was up 0.1% at 10,557.86.

The CAC 40 index in Paris was up 0.7% and Frankfurt's DAX 30 up 0.5%.

"In light of Pfizer's announcement that its vaccine was found to be 90% effective, expectations are now for the global economy to recover considerably more quickly," said City Index analyst Fiona Cincotta.

In the FTSE 100, International Consolidated Airlines Group was the best performer,up 5.7% after Goldman Sachs and Bank of America both upgraded the British Airways parent to Buy from Neutral.

Flutter Entertainment was up 2.5% after the gaming company said its performance in the third quarter exceeded expectations in both sports and gaming.

For the quarter ended September 30, total revenue was up 27% to GBP1.33 billion from GBP1.04 billion in the third quarter last year. Sports revenue was up 32% to GBP798 million from GBP606 million, and gaming revenue was up 21% to GBP527 million from GBP436 million.

Looking ahead, Flutter expects annual earnings before interest, tax, depreciation and amortisation, excluding the US, to be in a range between GBP1.28 billion from GBP1.35 billion, driven by higher customer volumes across all divisions. This is higher than the previously guided range of GBP1.18 billion to GBP1.33 billion.

Oil majors BP and Royal Dutch Shell 'A' and 'B' were up 2.0%, 1.8% and 1.7% respectively tracking spot oil prices higher.

In addition, Berenberg raised Shell to Buy from Hold.

Brent oil was trading at USD44.63 a barrel Wednesday morning, up sharply from USD43.08 late Tuesday.

"Oil prices continue to revel on the back of Pfizer's vaccine announcement. In reality, this is more about regularizing the economic activity and individual mobility through 2021 and 2022, suggesting that the near-term price impact should reflect more about OPEC +'s upcoming decisions on quotas or the level of lockdowns needed in the northern hemisphere through the forthcoming winter months," explained AxiCorp's Stephen Innes.

BAE Systems was up 1.8% after the defence company said it has continued to deliver a resilient performance in line with its expectations for a strong second half.

The Farnborough-based firm said full-year guidance for 2020 sales and cashflow remains unchanged from the 2020 interim results. However, underlying earnings per share are now expected to be slightly higher than previously guided, with good operational performance and an expected lower tax rate offsetting negative currency movements.

Further, BAE said order intake expectations for 2020 are ahead of its original pre-Covid-19 planning for the year.

At the other end of the large caps, gold miner Fresnillo was the worst performer, down 3.1%, tracking spot gold prices lower.

The precious metal was quoted at USD1,875.70 an ounce early Wednesday, down against USD1,882.66 late Tuesday.

In Tokyo, the Nikkei 225 index closed up 1.8% on Wednesday. In China, the Shanghai Composite closed down 0.5%, while the Hang Seng index in Hong Kong finished down 0.3%.

The pound was quoted at USD1.3284 on Wednesday morning, up from USD1.3224 at the London equities close Tuesday.

UK Prime Minister Boris Johnson will face sustained pressure from within his own party not to extend the national lockdown next month after senior Tory backbenchers formed a group to resist any such move. Some 32 Conservatives rebelled against the government when the Commons approved the second lockdown for England which lasts until December 2.

The prime minister said he expects the nation to return to a tiered local system by then and promised members of Parliament a vote for the replacement to the four-week lockdown. Former chief whip Mark Harper and ex-Brexit minister Steve Baker will lead the "Covid recovery group" to resist any extension of the measure in the Commons vote.

The euro stood at USD1.1792 early Wednesday, lower from USD1.1817 late Tuesday. Against the yen, the dollar was trading at JPY105.47, firm from JPY105.27.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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