- FTSE 100 index closes up 1.83%
- Apple wins in EU court
- OPEC+ meeting on production cuts today
5pm: FTSE closes firmly higher
FTSE 100 index closed higher on Wednesday as markets basked in some optimism over a potential coronavirus vaccine.
Footsie finished up almost 113 points, or 1.83%, at 6,292, while the midcap FTSE 250 gained nearly 246 points, or 1.43%, at 17,420.
American biotech group Moderna Inc (NASDAQ:MRNA) shares surged after it released promising trial data, while news circulated of potential good news also coming from a team at Oxford university.
"The vaccine news has helped to provide a fresh bullish catalyst for a market that was looking rather tired and overextended, with investors sceptical that earnings season could deliver the hoped-for parade of optimism," said Chris Beauchamp, chief market analyst at online trading firm IG.
US and Canada 4pm/11 EST
Wall Street stocks started strongly as vaccine hopes prompted a more bullish attitude to risk. The Dow Jones Industrial Average added over 245 points at 26,887, while the S&P 500 gained over 28 at 3,225. In Canada, the S&P/TSX Composite gained over 132 points at 16,041.
Proactive North America headlines
Altamira Gold Corp (CVE:ALTA) (OTCPINK:EQTRF) (FSE:T6UP) makes more progress at Cajueiro gold project with second trial mining license
MGX Minerals Inc (CSE:XMG) (OTCMKTS:MGXMF) files for 3,000 metres of diamond drilling at Heino Gold deposit and Tillicum claims in British Columbia
GGX Gold Corp (CVE:GGX) (OTCMKTS:GGXXF) kicks off trenching at the Gold Drop project in British Columbia
Gold Resource Corp (NYSEAMERICAN:GORO) posts 2Q production numbers for Mexican and US operations, logs 41% jump in Nevada gold production
PreveCeutical Medical Inc (CSE:PREC) (OTCQB:PRVCF) advances Dual Gene Therapy Research Program combatting Type 2 diabetes and obesity
3.50pm: Apple wins €13bn tax case against EU regulators
FTSE 100 kept climbing ahead of close, rising 142 points to 6,322 with sterling was up 0.5% to US$1.2617.
The top riser was British Airways owner International Consolidated Airlines Group SA (LON:IAG) with a 11% jump to 230p, perhaps following Virgin Atlantic’s successful endeavour to secure a £1.2bn rescue deal.
Elsewhere, Apple Inc (NASDAQ:AAPL) won against the European Union after the bloc’s second-highest court ruled it will not have to pay €13bn (£11.6bn) in back taxes as it had not broken competition laws.
The European Commission, which originally brought the case, demanded the iPhone maker pay the money for tax incurred in Ireland following a ruling in 2016 which found that the company had been given illegal tax breaks by the Irish government.
The Commission also claimed that Ireland had allowed Apple to attribute nearly all of its Eu earnings to its head office in the country, despite existing only on paper and effectively avoiding taxes across other member states.
The ruling, if it is not appealed and overturned in the European Court of Justice, will be a major blow for EU regulators as they try to clamp down on numerous bespoke tax deals for major corporations in member states.
Similar cases against Swedish furniture maker Ikea and sportswear brand Nike are due to be ruled on soon, while the EU is also rumoured to be considering charges against e-commerce giant Amazon Inc (NASDAQ:AMZN) for anti-competitive activity.
2.30pm: Wall Street opens in the green ahead of OPEC+ meeting
The Footsie trimmed its gains, adding 108 points to 6,287 as Wall Street opened in the green on a wave of optimism over COVID-19 vaccines data.
The Dow advanced 343 points to 26,986 and the S&P500 was up 31 points to 3,228.
Meanwhile, the oil industry is feeling uneasy about today’s OPEC+ meeting around the tapering of previously agreed production cuts.
Oil prices were a bit lower in fear of tapering, however reached WTI spiked above US$40 following Moderna’s results on its vaccine candidate.
According to Craig Erlam, analyst at OANDA, the most sensible thing would be to extend the full 9.6mln barrel cuts by a month to August, as it will allow the global economy more time to show it is on a sustainable path to recovery.
“It will also hopefully allow for these spikes in cases to be dealt with a provide evidence that we're better prepared to deal with them, without too much of an economic cost,” he said.
“Perhaps that's all a bit too hopeful but I'm not convinced by the tapering case this month, maybe producers will agree. If they want to see oil above US$40, they'll probably need to.”
1pm: Positive Oxford vaccine news expected soon
The Footsie jumped 125 points to 6,305 at lunchtime after ITV revealed there is positive news coming on the vaccine developed by the University of Oxford.
The first data is going to be published in the Lancet.
The candidate is reportedly generating the kind of immune response researchers were hoping to see, although efficacy has to be properly evaluated in the final phase of trials currently undertaken in Brazil.
“With Moderna reporting overnight that it had seen a ‘robust’ immune response from all 45 of the patients in its early huge trial, investors already had a reason to ignore the ongoing re-lockdowns and accelerating numbers of covid-19 cases around the globe,” said Connor Campbell at Spreadex, adding that US stocks are expected to open higher.
11.45am: ASOS dips despite booming lockdown sales
The Footsie kept rising in late morning, gaining 77 points to 6,256.
The online retailer said customer demand for key 'lockdown' category items, such as casualwear, activewear and beauty products, outstripped supply so it continues to expand capacity at its warehouses.
However, uncertainty looms especially as its 20-something customers are some of the hardest-hit segments of the population.
“ASOS intends to return the taxpayer’s cash it received under the furlough scheme as trading has been stronger than anticipated, which shows confidence. This clashes slightly with ASOS’ cautious outlook for demand,” said William Ryder, analyst at Hargreaves Lansdown.
“We think ASOS is well-positioned to benefit from a recovery as long as their customers have money to spend.”
10.50am: BT to keep Huawei technology for emergency services network
The Footsie added a few more points in mid-morning, rising 48 points to 6,227.
However, it was revealed it will keep using Huawei technology for emergency services.
The telecoms firm is building a £9bn network for 300,000 frontline users, including the police, fire and ambulance services, The Times reported.
It will handle sensitive information, such as sharing patient data between emergency vehicle and hospitals, add extra radio frequencies in rural areas and over 400 new mast sites.
The FTSE 100-listed firm said two years ago it would remove Huawei equipment from the core of the network but it would remain in elements such as masts and antennas.
It is though removing parts made by the Chinese giant from its existing mobile network, as well as excluding them from the 5G network under construction.
9.55am: Moderna confirms positive results on early-stage trials for COVID-19 vaccine
FTSE 100 trimmed its gains in mid-morning, rising 31 points to 6,211, while sterling was 0.4% higher at US$1.2608.
In the US, (NASDAQ:MRNA) shot up 18% to US$88.66 in premarket trading after confirming positive results on its COVID-19 vaccine candidate, following preliminary data shared in May.
The jab was safe and built an immune response in all 45 participants of the first phase of clinical trials.
A fifth of the participants reported one or more severe adverse effects at a the 250 µg dose level, while the 100 µg one caused effects which were transient and mild or moderate in severity.
The biotech firm has now completed the enrolment of 300 healthy adults aged 18-55 and another 300 above 55 for the second phase of trials, while the final phase will involve 30,000 participants in the US.
The company has produced enough doses for the trials and remains on track to deliver 500mln and potentially up to 1bn jabs per year, beginning in 2021.
“Like with every vaccine update, the fact these are only baby steps when considering the time line of clearance, mass production and implementation didn’t stop investors buying into the optimism,” Connor Campbell, an analyst at Spreadex, noted.
8.50am: Footsie pushes ahead
The FTSE 100 took its cue from a buoyant Wall Street and Asia’s main markets to kick off Wednesday firmly in positive territory.
In early trade, the index of UK blue-chips advanced 54 points to 6,233.40.
Another batch of economic data – this time June inflation – added little in the way of real insights as to the health of the British economy.
The cost price measure came in at 0.6%, up from 0.5% in May, with lockdown demand for clothing and video games supporting the modest upward momentum.
Economics wonks at the EY ITEM Club expect inflation to “rise gradually during 2021 as the recovery gains traction”, reaching 2% by the end of next year.
Leading the fallers with a decline of 4.7% was Burberry (LON:BRBY), which warned of the lingering impact of the coronavirus while presiding over a 45% first-quarter sales decline.
“The duration of a return to normality remains largely unknown and ongoing political tensions in the Asian region are still a concern,” said Richard Hunter, analyst at Interactive Investor.
“Despite the recovery of the shares since the March nadir, the performance over the last year reflects these concerns, with the shares having dropped 22% in that period, as compared to a decline of 18% for the wider FTSE100. The market consensus of the shares has recently deteriorated slightly to come in at a weak hold, and even though Burberry is playing to its strengths as far as possible, the environment remains gruelling.”
Among the small-caps, two members of the life sciences sector showed themselves to be coronavirus resistant, weighing in with strong end-of-period trading statements.
Allergy Therapeutics (LON:AGY), up 7.7%, said its earnings would exceed expectations, while cell engineering specialist MaxCyte (LON:MXCT), was up 6.7% after seeing first-half revenues soar by just under a third.
Proactive news headlines:
Allergy Therapeutics PLC (LON:AGY) has said its earnings are likely to exceed expectations after a strong year. Net revenues for the 12 months ended June 30, 2020, were £78.2mln, up 6%, it said, while the firm was in a strong financial position with £37mln in the bank at the period end. The performance of the group, which develops and sells short course allergy inoculations, was particularly impressive given the challenges in the closing quarter of the year posed by the coronavirus (COVID-19) lockdown.
AFC Energy PLC (LON:AFC) is getting into the zero-emission motorsport business by teaming up with Extreme E, the team behind FIA’s Formula E racing championship. Extreme E is planning a hydrogen-fuelled electric SUV rally racing series that is slated to launch in early 2021, and AIM-quoted AFC will provide off-grid power to the racing series - including its zero-emission charging system. The series is designed to be a practical and symbolic showcase with the off-road race events taking place in remote locations which, according to AFC, will highlight important climate issues and also show how hydrogen can be used as a viable alternative fuel all environments.
Bezant Resources PLC (LON:BZT) told investors that due diligence for its proposed acquisition of the Hope Gold project in Namibia is “progressing as anticipated” as it provided new details from ongoing technical work. The company, in a statement, noted historical drilling information that has come to light during due diligence which creates further excitement and confidence for the project. "This is an exciting potential project for the company and the more we dig into the archives, it becomes evident that resources quoted were the subject of extensive drilling programmes which gives us added confidence," Colin Bird, Bezant chief executive said in a statement. “It is also evident that the contribution of gold has been neglected which in today's times could in our view be quite significant.”
BATM Advanced Communications Limited (LON:BVC) has launched three new diagnostic kits which it said will “significantly advance” the diagnosis of coronavirus and other respiratory illnesses. The networking and medical laboratory systems group said one of the new kits is a serologic test, which has been upgraded to measure the quantity of antibodies in the blood rather than just their presence or absence. The second new kit is an upgraded antigen test to detect spike gene and enable the diagnosis of coronavirus in people with low viral loads, increasing testing accuracy. The final new kit is a molecular diagnostics test that has been developed to rapidly identify the specific respiratory virus or bacteria in someone presenting with symptoms of, or suspected to have pre-symptomatic respiratory illnesses. BATM said it expects to begin sale and production of the kits at its Adaltis facility in Italy at the end of the third and start of the fourth quarter of 2020.
Open Orphan PLC (LON:ORPH) said it has signed an option agreement to acquire a company called CHIMagents for a nominal sum. The business designs, manufactures, and tests agents for use in challenge studies, which complements the work carried out in the infectious diseases field by Open Orphan subsidiary hVIVO. CHIMagent's Adrian Wildfire, who has over 20 years of industry experience, will join hVIVO as a director. Open Orphan chief executive Cathal Friel said the option agreement was an “important strategic step as we rapidly grow our pipeline of challenge studies”.
MaxCyte PLC (LON:MXCT) said its revenues grew by 30% to US$10.9mln in the first half of 2020 and told investors that its research and development operation was expected to be self-funded by the end of the year. The company licences out its technology, which generates a revenue stream and potential milestone payment, currently worth an estimated US$800mln, from life sciences companies that use its cell engineering know-how in drug development. It has also begun advancing its own potential treatments, creating an R&D business called CARMA Cell Therapies.
Galileo Resources PLC (LON:GLR) has announced the appointments of two highly experienced and successful Kalahari Copper Belt exploration geologists, Dr Quinton Hills and Fred Nhiwatiwa as members of the company's senior management to provide assistance with its exploration projects in Botswana. The company noted that the new team members have previously discovered mineral deposits that have led to the development of mines in Botswana. Galileo said it will shortly commence a comprehensive and targeted exploration program utilising geochemical and geophysical techniques that have been routinely used to find copper-silver deposits in the Kalahari Copper Belt.
Anglo Asian Mining PLC (LON:AAZ) has reported that it raked in an extra US$3.2mln in cash in the second quarter of 2020. In the three months to June 30, 2020, the Azerbaijan-focused miner said its cash balance stood at US$29.2mln at the end of the period, while gold production in the quarter had come in at 12,048 ounces (oz) compared to 17,149 oz in the prior year. Anglo Asian said the lower figure was due to lower ore grades processed from its Gedabek open pit operation, which had been its efficiency impacted by the coronavirus pandemic, and less ore from the Gadir underground mine.
Woodbois Limited (LON:WBI), the African forestry and timber group, has raised £13.1mln from existing investors, retail investors - via the PrimaryBid platform - and institutions as part of a debt restructuring and refinancing. Through the debt restructuring, holders have agreed to convert 75% of US$30mln of outstanding convertible bonds into new ordinary shares and new non-voting shares. The new shares were issued at 2p, a 43% discount to the close last night. In a statement, Woodbois said the fundraise and debt restructuring will position the company to grow its timber production and trading activities rapidly.
Kodal Minerals PLC (LON:KOD), the mineral exploration and development company focused on its Bougouni Lithium Project in southern Mali, said it has secured sufficient funding resources to accelerate completion of the next phases of its development projects and to evaluate exciting new opportunities via a US$1.5mln unsecured convertible loan agreement with Riverfort Global Opportunities PCC and YA II PN Ltd. It said the £1.5mln loan agreement, with an initial advance of US$750,000, will have a 15-month term and carry interest at a rate of 9.85% per annum payable monthly. The investors will have the option to convert outstanding principal and interest into new ordinary shares in the company. Kodal can repay the loan at any time in cash, and the investors will also be issued with warrants exercisable into ordinary shares in the company at a premium to the current share price.
Feedback PLC (LON:FDBK) has announced the appointment of Philipp Prince as a new independent non-executive director, effective immediately. It noted that Prince is a chartered accountant with extensive experience in senior finance roles in both private and listed technology companies and runs his own financial consultancy business, is a board adviser at Overmore Limited, a marketing technology firm, and recently joined BCB Group Holdings Limited, a financial services challenger, as its non-board CFO. He was previously the CFO of Defenx PLC, an AIM-listed mobile cybersecurity company, where he managed the IPO process, fundraising and investor relations and Interim CFO at Enecsys PLC, a private equity-backed solar micro-inverter developer. For over 20 years, Philipp worked at BDO LLP, where he was a corporate finance partner from 2002-2013. Rory Shaw, chairman of Feedback, commented: "Philipp has strong experience within the technology sector, especially fundraising, capital markets and M&A. His input will be invaluable as we look to deliver shareholder value with the rollout of Bleepa to the NHS and other healthcare providers."
e-therapeutics PLC (LON:ETX) has announced that further to the fundraise it announced on July 7, 2020, Numis Securities has exercised the broker option in respect of 2,875,000 new ordinary shares raising gross proceeds of approximately £0.35mln for the company. The broker option shares are being issued at a price of 12p per share, being the placing price and will be issued on the same terms and conditions as placing shares. With the completion of the broker option, the company said it can confirm that a total of £11.6mln in gross proceeds has been raised; comprising of a firm placing of £6.3mln, a share subscription of £2.8mln, a retail offer via the PrimaryBid platform of £750,000 and £1.69mln via the broker option.
Greatland Gold PLC (LON:GGP), the precious and base metals exploration and development company, said it has received notice from Numis Securities that it is closing its natural resources division. As a result, Numis will cease to act as joint broker to the company with immediate effect. The company added that is in advanced discussions to appoint a new joint broker to focus on further growing Greatland's institutional investor shareholder base, in the meantime, SI Capital is sole broker to the company.
6.30am: Strong start anticipated
The FTSE 100 is expected to start higher on Wednesday amid hopes that continued stimulus from central banks could help support a steady economic recovery from the coronavirus pandemic.
Spread-better IG expects the UK benchmark to open around 64 points higher after ending Tuesday’s session up just 4 points at 6,179.
London seems to be taking its cue from Wall Street, which moved higher overnight amid signals from the Federal Reserve that it will keep stimulus flowing to help the US economy recover from the slowdown caused by the pandemic.
The Dow Jones Industrials Average closed 2.13% higher at 26,642 while the S&P 500 climbed 1.34% to 3,197 and the Nasdaq Composite rose 0.94% to 10,488.
Sentiment was also lifted by better earnings from some US banks, although concerns around renewed lockdown measures in some areas persist amid weak economic forecasts for the year ahead. Markets may also become jittery amid deteriorating relations between China and the US as well as other western nations.
Hopes of the gradual economic recovery supported by central banks and the murky geopolitical picture made for a more mixed performance in Asia this morning, with Japan's Nikkei 225 up 1.56%, while Hong Kong’s Hang Seng fell 0.46%.
On currency markets, the pound was up 0.17% at US$1.2571 against the dollar, although UK inflation data due later today could provide some catalyst for movement as investors receive more clarity on the UK economy.
Aside from inflation, there will be a focus on the retail sector on the corporate front too, with updates due from Burberry, ASOS, Dixons Carphone, and Dunelm.
Around the markets:
- Sterling: US$1.2571, up 0.17%
- Brent crude: US$43.09 a barrel, up 0.44%
- Gold: US$1,806 an ounce, down 0.13%
- Bitcoin: US$9,249, down 0.13%
6.45am: Early Markets: Asia / Australia
Asian stocks shed earlier gains and were trading mixed as concerns over US-China tensions weighed on investor sentiment.
Chinese stocks led losses among the region’s major markets, with the Shanghai composite down 1.39% and Hong Kong’s Hang Seng declining 0.55%.
In Japan, the Nikkei 225 rose 1.31% in afternoon trade while South Korea’s Kospi gained 0.55%.
In Australia, the S&P/ASX 200 advanced 1.64%, with the materials and tech sectors both up by more than 2%.
Proactive Australia news:
Oklo Resources Ltd (ASX:OKU) has exercised two options held over the Kossaya and Sari projects, increasing its ownership from 65% to 100% and becoming one of the largest landowners in highly gold prospective west Mali.
PNX Metals Ltd (ASX:PNX) has signed a non-binding term sheet for a proposed A$40 million commitment and joint venture to develop gold processing infrastructure at Fountain Head Gold Project in the Northern Territory.
Comet Resources Ltd (ASX:CRL) has further demonstrated the economic potential of its Springdale Graphite Project in southern Western Australia with strong graphite grades and recoveries achieved in initial metallurgical test-work.
Kingston Resources Ltd (ASX:KSN) has begun a 5,000-metre resource definition reverse circulation (RC) drilling program at its 75%-owned Livingstone Gold Project, 140 kilometres northwest of Meekatharra in the Bryah Basin of Western Australia.
Nexus Minerals Ltd (ASX:NXM) is progressing its gold strategy centred on WA’s Eastern Goldfields with a feasibility study underway on the Pinnacles joint venture (JV) project and reverse circulation (RC) drilling to start this month at the Wallbrook project.
eSense-Lab Ltd (ASX:ESE) continues to achieve strategic and operational milestones as it progresses a commercialisation strategy for evidence-based terpene product development for medicinal and wellness uses.
VRX Silica Ltd (ASX:VRX) has received approval from Native Title claimants for the terms of its proposed mining project agreement for the Arrowsmith North and Arrowsmith Central silica sand projects in Western Australia.
Mako Gold Ltd (ASX:MKG) has delivered multiple high-grade gold intersections in first assay results from an ongoing 10,000-metre reverse circulation (RC) and diamond drilling program on Tchaga Prospect at its 224-square-kilometre Napié Project in Côte d’Ivoire.