LONDON MARKET PRE-OPEN: Eyes on Fed minutes; Astra seals drug transfer

(Alliance News) - Stock prices in London are seen opening lower on Wednesday, with Tuesday's new year optimism giving way to trepidation ahead of the latest Federal Reserve meeting minutes.

"The Fed minutes should give some light on the Fed's plans at today's release. The December dot plot hinted at three 25 basis point rate hikes throughout this year, while the Fed could push for at least a 100bp total hike in 2022 to fight the rising inflation," Swissquote analyst Ipek Ozkardeskaya commented.

IG futures indicate the FTSE 100 index will open 18.0 points, or 0.2%, lower at 7,487.15. The blue-chip index surged 120.61 points, 1.6%, to 7,505.15 on Tuesday.

In early UK corporate news on Wednesday, AstraZeneca said it has completed the transfer of the global rights for two drugs. FTSE 250-listed Africa-focused telecommunications services Airtel Africa reported the first closing of a tower sale in Tanzania.

The latest Fed minutes are released at 1900 GMT. After the most recent Fed meeting, the central bank said it was on track to end its pandemic-era bond purchases by March.

Avatrade analyst Naeem Aslam commented: "One particular factor that traders will also be watching in these minutes will be how concerned the Fed is about Omicron, a Covid variant. So far, traders and investors have started to brush away any qualms related to Omicron as they have started to believe that the consequences of this Covid variant aren't that dire. But they would like to hear an echo of this in the Fed minutes. The hospital data on Omicron shows things aren’t that serious, which is an encouraging symbol."

In addition to the latest Fed minutes, eyes also will be on the ADP jobs report in the US, a precursor to Friday's nonfarm payrolls. The ADP numbers are reported at 1315 GMT.

The ADP report is expected to show that 400,000 jobs were added in the US in December, according to FXStreet-cited consensus.

Elsewhere, the economic events calendar on Wednesday has services PMI readings from Germany, the eurozone and the US at 0855 GMT, 0900 GMT and 1445 GMT respectively.

In China, the Shanghai Composite ended down 1.0% on Wednesday, while the Hang Seng in Hong Kong was 1.5% lower in late trade. The Nikkei 225 in Tokyo inched up 0.1%, while in Sydney, the S&P/ASX 200 lost 0.3%.

US stocks closed mixed on Tuesday, with tech stocks dropping markedly. The Dow Jones Industrial Average closed up 0.6%, the S&P 500 ended down 0.1%, and the Nasdaq Composite dropped 1.3%.

The pound was quoted at USD1.3533 early Wednesday, down from USD1.3542 at the London equity market close on Tuesday. The euro stood at USD1.1300, down slightly from USD1.1303. Against the yen, the dollar was trading at JPY115.95, fading from JPY116.03.

Among London listings, AstraZeneca on Wednesday said it has completed the transfer of global rights to Eklira and Duaklir to Swiss pharmaceutical firm Covis Pharma.

Both medicines are delivered via the Genuair device and used for the treatment of patients with chronic obstructive pulmonary disease.

The Cambridge-based drug maker has received a USD270 million payment.

"AstraZeneca will also receive payments in respect of certain ongoing development costs related to the medicines," the company said.

Elsewhere in the health space, AIM listing Verici Dx said it struck a deal with New York-listed biotechnology firm Illumina.

The collaboration will help "expedite" the launch of predictive artificial intelligence components of Verici Dx products. Verici Dx will have access to the Illumina Connected Analytics cloud-based data management and analysis software platform.

Kidney transplant test developer Verici Dx said the deal is an "important milestone".

"Having access to this state-of-the-art platform provides a substantial enhancement to Verici Dx's data management and interrogation capabilities and bolsters its ability to develop highly predictive future products. It will also enable Verici Dx to stay at the forefront of improving patient outcomes," the company added.

Elsewhere among London listings, Airtel Africa reported the first closing of a wider transaction to sell its tower assets in Tanzania. The assets will be sold to a joint venture containing SBA Communications, an operator of wireless communications infrastructure, and Paradigm Infrastructure, which develops wireless infrastructure in selected growth markets.

Airtel will net USD176.1 million for the whole deal and has received USD159 million of these proceeds following the first closing.

"Under the terms of the transaction, Airtel Africa's subsidiary in Tanzania will continue to develop, maintain and operate its equipment on the towers under separate lease arrangements, largely made in local currencies, with the purchaser," Airtel said.

"Around USD60 million from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the government of Tanzania."

Former London listing Ryanair reported a sharp annual rise in December traffic. Traffic in December surged to 9.5 million passengers from 1.9 million a year earlier.

However, this represented a monthly fall from 10.2 million in November and was the lowest monthly total since July.

December's load factor improved to 81% from 73% a year earlier, though down from 86% in November.

On Tuesday, FTSE 250-listed Wizz Air said that booked passenger numbers were up 21% in December, to 2.6 million, from 2.2 million in November. A year earlier, passenger numbers were just 665,772.

Travel stocks had surged on the London Stock Exchange on Tuesday, amid the expectation the Omicron variant of Covid-19 will not lead to stringent mobility curbs.

Brent oil was quoted at USD80.04 a barrel early Wednesday, down from USD80.27. Gold stood at USD1,815.11 an ounce, up slightly from USD1,814.05.

By Eric Cunha; ericcunha@alliancenews.com

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