- FTSE 100 index closes in red
- Pfizer's vaccine shows early signs of efficacy
- US private payrolls increase by 2.2mln in June
5pm: FTSE closes down
FTSE 100 index closed marginally lower on Wednesday after what was a volatile trading day.
The UK's index of leading shares finished in the red to the tune of nearly 12 points, or 0.19%, to close at 6,157.
However, the more domestic focused FTSE 250 added over 70 points to close at 17,189.
"Stocks saw a lot of volatility today as health concerns weighed on sentiment in the morning, but the mood picked up on hopes of a Covid-19 vaccine," noted David Madden, analyst at CMC Markets.
"The tick up in tensions in Hong Kong also contributed to the negative move. Beijing have introduced a controversial law that will give it more control over the former British Overseas Territory, and that could impact Chinas international relations," he added,
Shares in drugs firms Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) ticked higher in New York on potential coronavirus vaccine news. The pair reported positive early data from an ongoing Phase 1/2 study.
On Wall Street, the Dow Jones Industrial Average added around eight points at 25,820, while the S&P 500 gained over 12 at 3,112.
3.55pm: Carnival rises after securing multi-billion-dollar loans
The Footsie trimmed its gains again before close, adding just 1 point to 6,171.
Cruise operator Carnival plc (LON:CCL) was up 5% to 1,039p after entering two secured term loans worth US$1.8bn and US$800mln respectively.
The facilities, agreed with several banks including JP Morgan, expire in June 2025.
As other travel stocks, the FTSE 250-listed firm has been hit by travel restrictions and was forced to cancel or move several cruise journeys scheduled for most of 2020.
In the US, the ISM manufacturing index rose to 52.6 from 43.1, above the consensus, 49.8.
Despite the improvement, Pantheon Macroeconomics said “the appearance of normalcy is misleading” as, just because the figures are above pre-pandemic levels, it does not mean the market is in better shape.
“The ISM is a diffusion index, measuring rates of change, not levels. It doesnt care where activity ended the previous month – in this case, very depressed – or where it ended this month; also very depressed, but a bit less so,” said economist Ian Shepherdson.
“Were happy that manufacturing activity appears to have risen in June, but a full recovery is a long way off, and were worried about the risk of a temporary relapse in the face of the second Covid wave.”
2.50pm: Pfizer posts positive early data for Covid-19 vaccine
UK and US stocks turned green in the afternoon after a Covid-19 vaccine developed by Pfizer Inc. (NYSE:PFE) and BioNTech (NASDAQ:BNTX) showed positive results in the early stage of clinical trials.
The two firms are developing four candidates, with the most advanced showing safety and efficacy.
If studies are successful and the vaccine receives regulatory approval, the pair could manufacture up to 100mln doses by the end of this year and over 1.2bn doses in 2021.
Pfizer advanced 5% to US$34.18 at the opening bell.
Londons leading index gained 17 points to 6,187, the Dow jumped 166 points to 25,980 and the S&P500 was up 16 points to 3,116.
1.45pm: US private payrolls for June miss expectations
The Footsie pared some losses after lunch, shedding 31 points to 6,137.
In the US, the latest ADP reading showed a 2.2mln increase in private payrolls in June, below the 2.9mln consensus and the revised May reading, 3mln.
Pantheon Macroeconomics said that if the June estimate missed the official number by the same margin as May, we would be looking at an 8mln increase, though it is unlikely.
“ADP hugely undershot the official May payroll number—by 5.6mln—probably because of the drag from the19.7mln plunge in April private payrolls, which fed into the ADP model with a one-month lag,” said chief economy Ian Shepherdson.
“This wont be a problem for June, because the official May private payroll number was +3.1mln. But ADP might also have missed Mays increase in employment at very small firms, which dont use the companys payroll processing services but were captured by employment data released by Homebase.”
12.30pm: Upper Crust owner SSP plans job cuts as Ryanair launches biggest-ever cheap ticket sale
FTSE 100 was down 67 points to 6,103 at lunchtime, while Wall Street was expected to open in the red amid global market volatility.
In the battered travel sector, Upper Crust owner SSP Group plc (LON:SSPG) is considering plans to cut up to 5,000 jobs as it expects to open only around 20% of its units in the UK by autumn.
The FTSE 250 group, which owns food outlets in airports and train stations, saw sales crashing 90% in June, slightly better than 95% posted for April and May.
The news come a day after easyJet PLC (LON:EZJ) and Airbus announced thousands of job cuts.
Meanwhile, Ryanair PLC (LON:RYA) expects around 4.5mln passengers in July as it ramps back up towards its normal flight schedule following lockdown.
The low-cost airline has launched what it said it was its biggest ever sale of cheap tickets with 500,000 one-way seats on offer in late August and September from £19.99.
Investors were not that impressed, with shares dipping 2% to €10.41 on the announcement.
11.35am: US buys almost all Gilead Sciences' remdesivir supply
The Footsie slid underwater in late morning, dipping 32 points to 6,136.
Markets have been volatile amid the usual worries of a second wave of infections, while some people were reported to have contracted the swine flu in China.
In coronavirus news, Gilead Sciences Inc (NASDAQ:GILD) has agreed to sell almost all of its remdesivir supply to the Trump administration until September.
The investigational antiviral, which is temporarily approved in certain countries as coronavirus treatment, made the headlines on Monday after Gilead priced it at US$390 per vial, making a five-day course cost US$3,120.
But following the US deal, the UK and Europe will not be able to access the drug until October, Sky News reported.
Low-income countries can purchase a generic version after the Gilead inked licensing agreements with five manufacturers, but more developed economies have to go through the US pharma giant, which holds the patent.
Clinical trials showed that the antiviral can help patients with moderate pneumonia to recover faster compared to the standard of care over a 5-day course, while the 10-day treatment did not show statistical significance.
Last month, the cheaper and widely available steroid treatment dexamethasone was found to reduce death by up to one third in patients with severe COVID-19 symptoms.
10.40am: Gold reaches eight-year highs
The Footsie was back in the green, adding 11 points to 6,180, while sterling was flat at US$1.2395.
Gold futures rallied above US$1800 per ounce on Tuesday, a new eight-year high.
Neil Wilson, at Markets.com, noted that real US rates remain at the lowest levels in seven years, while benchmark treasury yields are at record lows.
Gold is seen as a safe haven in times of crisis, however analysts expect an inflation surge.
“Fading momentum on the Commodity Channel Index (CCI) with a bearish divergence to the price action suggests a near-term pullback may be required – perhaps at the US$1800 round number resistance – before the next significant leg higher can be made,” Wilson commented.
9.35am: UK manufacturing PMI shows signs of stabilisation
The Footsie was flat on Wednesday morning, down just 1 point to 6,168.
Fresh data on the UK manufacturing sector showed signs of stabilising in June.
The PMI rose to 50.1 last month up from 40.7 in May and unchanged from the flash estimate, which is just above the 50.0 neutral line.
Manufacturing production rose slightly for the first time in four months, as factories restarted, clients reopened with easier lockdown restrictions.
The intermediate goods sector saw the steepest growth, while consumer goods producers saw only a mild expansion, though investment goods output fell again, but at a much reduced pace.
“The planned loosening in COVID-19 restrictions on the 4th July should aid further gains in coming months. Although the trend in new export business remains weak, that should also strengthen as global lockdowns and transport constraints ease further,” commented Rob Dobson, director at IHS Markit, which compiles the survey.
“The main focus is now shifting towards the labour market. Concerns are rising about the potential for marked job losses, especially once the phase out of government support schemes begins.”
8.40am: Slow progress
The FTSE 100 made a muted start to proceedings on Wednesday as investors continued to weigh the risk of a second wave of the coronavirus (COVID-19) pandemic.
The index of UK blue-chip shares rose 8 points to 6,177.77.
Wall Street closed Tuesday in fine fettle and seemingly oblivious to an upsurge in cases there, while in Asia the mood was more circumspect. However, positive factory data from China, which showed manufacturing back in growth mode in June, helped lift the mood a little.
Here at home, the latest update on the economic health of the UK was provided by the Nationwide House Price Index, which recorded its first monthly decline in eight years.
“As ugly as they are, these numbers were unavoidable given the unprecedented economic shock delivered by Covid-19,” said David Westgate, chief executive of Andrews Property Group.
"While prices were always going to take a hit as a result of lockdown, we are not expecting them to continue to spiral downwards.
"The comprehensive support package put in place by the government to protect the economy, along with record low interest rates, will support the property market in the short- to medium-term.”
On the corporate front, first-quarter trading from Sainsbury (LON:SBRY) lifted morale and with it B&Q owner Kingfisher (LON:KGF), which probably also received a boost from the relatively benign house price data and the strong performance of Sainbury-owned general retailer Argos.
The market reacted negatively to what appeared to be a robust performance in the face of the current economic headwinds by infrastructure group John Laing (LON:JLG) as the stock subsided 8%.
Among the tiddlers, Catenae Innovation (LON:CTEA) was one of the stand outs with a 22% rise after the tech group revealed it is talks with buyers for its coronavirus passport app, Cov-ID.
Proactive news headlines:
Haydale Graphene Industries PLC (LON:HAYD) has announced a new collaboration with IRPC to develop organic conducting-based printing smart fabric for medical use, including face masks, using Haydales technology. The AIM-listed firm said it has been developing a functionalised graphene-coated fabric during the coronavirus (COVID-19) pandemic, and tests carried out by the Thailand Textile Institute showed antibacterial finishes over 99.3% on the textile material after ten washes.
Catenae Innovation PLC (LON:CTEA) has said its breakthrough app that records a persons coronavirus status is now ready for launch well ahead of schedule. It also revealed it is in discussions that could lead to “local and international sales opportunities”. The announcement followed some graphic design refinements to the Cov-ID digital passport system, which has raced through the development, prototyping and pilot launch phases to get to this stage in three months.
Ariana Resources PLC (LON:AAU) said that Özaltin Holding A.S., through its subsidiary, Özaltin Insaat, Ticaret and Sanayi A.S., has formally committed to proceeding with its acquisition of 53% of both the Salinbas Project and the Zenit Madencilik San. ve Tic. A.S. joint venture which is currently owned by Ariana in a 50:50 partnership with Proccea Construction Co. The AIM-listed exploration and development company operating in Europe announced on November 25, 2019, that it intends to partially dispose various interests held in Turkey to Özaltin, including jointly with Proccea, 53% of Zenit for US$50mln – to be split equally by Ariana and Proccea -, as well as an initial 17% of the Salinbas Project for US$mln.
IronRidge Resources Limited (LON:IRR) said it has completed the acquisition of CAPRI Metals SARL, giving it full ownership of a “highly prospective gold exploration portfolio” in Côte d'Ivoire. The Africa-focused mineral explorer said the acquisition completes its purchase of the Vavoua portfolio, which comprises three licenses and grants IronRidge exclusive rights to a tenure package adjacent to the 2.15mln ounce Abujar deposit.
Enteq Upstream PLC (LON:NTQ), an oil drill technology specialist, increased revenues by 7% in the year to March 31, 2020, despite the industry's problems in the US shale area. Sales in the twelve months year rose to US$10.9mln (2019: US$10.2mln) with underlying profits 24% higher at US$3.1mln. Growth outside of the US, especially in China and Saudi Arabia, helped offset the weak US market, said the company, with non-US revenue now accounting for 30% of the total.
Oncimmune Holdings PLC (LON:ONC) said its Brazilian distributor has received the regulatory all-clear for its lung cancer detection technology, paving the way for sales of the device in the country. Marketing authorisation for the EarlyCDT Lung blood test is effective immediately, providing partner Valentech International commercial access to one of the worlds largest healthcare markets. Brazil has a high unmet need for a diagnostic that could help cut the mortality rate for the disease. Figures for 2018 showed 34,000 people were diagnosed with lung cancer and there were 32,000 deaths that year.
OptiBiotix Health PLC (LON:OPTI) has signed a distribution deal covering Australia, New Zealand, Indonesia, and Thailand for its cholesterol and blood pressure reducing dietary supplements, CholBiome and CholBiome X3. Leading this latest leg of the international expansion will be Actial Farmaceutica, an Italian business with operations in Asia focused on probiotics and gut health. Since launching its CholBiome products containing the companys LP LDL formulation two years ago, the company has signed around 30 agreements in 50 countries.
Eden Research PLC (LON:EDEN) announced that it has moved office and opened up a new laboratory facility at Milton Park, a science cluster in Oxfordshire. The producer of sustainable biopesticides said the new facility will allow it to do more in-house, including formulation, microbiological screening, plant and seed evaluations and analytical work. It also features high-tech plant growth chambers, to undertake relatively rapid, small scale tests on different plant species.
Zanaga Iron Ore Company Ltds (LON:ZIOC) chairman has hailed “a rise in global investment into large scale iron ore projects”, which he said provides a strong investment case for the companys project in the Republic of Congo (ROC). In a statement accompanying the companys final results, Zanaga's non-executive chairman, Clifford Elphick also said iron ire prices had been resilient and premiums for “high quality iron ore products” had been maintained, further bolstering the companys investment case.
Benchmark Holdings PLC (LON:BMK) has secured the sale of its subsidiary FishVet, a provider of veterinary and diagnostic services, for between £14.4mln-£14.7mln in cash. The aquaculture genetics, health and nutrition firm said it has sold FishVet to Pharmaq, part of Zoetis Inc (NYSE:ZTS), the worlds largest producer of medicine and vaccinations for pets and livestock.
Curzon Energy PLC (LON:CZN) said negotiations over a potential reverse takeover by Sun Seven Stars Investment Group (SSSIG) are continuing. The oil and gas firm said a period of exclusivity between itself and SSSIG has been extended from its original end date of June 30, 2020, although formal terms covering the extension of the exclusivity period and the nature of additional financial support to be provided by SSSIG to the company have yet to be finalised. Curzon said the coronavirus pandemic and lockdowns in the UK and US had caused delays and disruptions to the overall due diligence process, however, both parties remained “positive” regarding a potential transaction.
Canadian Overseas Petroleum Limited (LON:COPL) has announced that its interim chief financial officer Ryan Gaffney, who took over the role on June 6, will become permanent on July 2. "Ryan has a background in investment banking where he spent 13 years with Canaccord in their London and Toronto offices. He will be a great addition to the company's management team as the company moves forward with its business plan”, COPL president and chief executive Arthur Millholland said in a statement. The group also said it expects around 438.5mln placing shares to be admitted to the standard segment of the LSEs main market on Thursday following completion of a £1.2mln financing that the company said will cover its working capital costs and allow it to continue focusing on its OPL 226 project in Nigeria.
Mineral and Financial Investments Limited (LON:MAFL) said it has agreed on a resolution to the earn-in option agreement at Lagoa Salgada with Ascendant Resources. M&FI, through a Swiss subsidiary, currently owns 75% of Redcorp Empreedimentos Mineiros, whose main asset is the 23Mt Lagoa Salgada polymetallic project in Portugal. The option currently is that Ascendant must fulfil its work obligations, totalling US$9.0mln, and pay M&FI US$2.5mln over the next 2 years to reach 50% ownership.
Aminex PLC (LON:AEX) said the longstop completion date for its Ruvuma farm-out agreement has been extended to July 14, 2020. The junior said partner ARA Petroleum and itself continue to work closely with the Tanzania authorities to obtain government approval and complete the farm-out as soon as possible. ARA has agreed not to demand repayment of a US$2mln loan that falls due on July 1, 2020, or to charge interest on a US$3mln funding arrangement, Aminex added.
[contf]
[contfnew]
Proactiveinvestors
[contfnewc]
[contfnewc]