FTSE dips despite AstraZeneca vaccine results and Brexit hope

FTSE 100 closes in the red, after initial rally spurred by AstraZeneca’s coronavirus vaccine news petered out.

Update (17:10): The FTSE 100 has closed in the red, after an initial rally spurred by AstraZeneca’s (AZN) coronavirus vaccine news petered out.

The UK blue-chip index closed 18 points, or 0.3%, lower at 6,334, with AstraZeneca among the fallers, down 3.8% at £80.00, as investors judged the results as lagging those of Pfizer’s (PFE.N) and Moderna’s (MRNA.O) vaccines.

(9:53) FTSE rises on Astra jab news

The FTSE 100 has risen as AstraZeneca’s (AZN) positive update on its Covid-19 vaccine lifted oil and travel-related stocks but gains were capped as the pound strengthened on hopes of a Brexit trade deal.

The main index rose 26 points, or 0.4%, to 6,378 as AstraZeneca became the latest pharmaceutical giant to provide hopes of a coronavirus vaccine. It said its jab, which has been developed in partnership with Oxford University, is up to 90% effective.

However, AstraZeneca’s shares slipped 1.8%, or 157p, to £81.60 as investors judged the results as lagging those of Pfizer’s (PFE.N) and Moderna’s (MNRA.O) vaccines.

‘The science is continuing to move in the right direction, with three major vaccines almost ready to go,’ said Spreadex analyst Connor Campbell.

‘Pfizer seems first in line, with The Telegraph reporting that the company’s joint venture with BioNTech (BNTX.O) could be given UK regulatory approval this week – that would be before the US, where the Food and Drug Administration won’t meet until 10 December to discuss authorisation.’

Travel-related stocks were the biggest blue-chip winners on the vaccine update, with British Airways owner International Consolidated Airlines (IAG) up 4.2%, or 6p, at 164p, and aerospace engineer Rolls-Royce (RR) gaining 2.8%, or 2p, to 102p.

Oil majors BP (BP) and Royal Dutch Shell (RDSA) both climbed 2.6%, to 250p and £12.26, respectively, buoyed by hopes of vaccines paving the way for a return to more normal levels of oil demand.

Gains on the internationally-focused main index were limited by a strong pound, which rose 0.7% to $1.337 against the dollar as reports suggested both the EU and the UK believed a Brexit trade deal could be reached before the 1 December deadline.

City Index analyst Fiona Cincotta said adding to the ‘upbeat mood’ was government confirmation that England’s lockdown would end on 2 December with a move back to tiered restrictions.

‘This should provide a massive boost to the high street retailers which have been a clear victim of the Covid-19 pandemic,’ she said.

‘Shops along with bars, restaurants, and gyms reopening in all areas of the UK in time for the key Christmas trading period means that the UK economy will once again be able to move forward on its recovery path.’

The news was all pointing in the right direction for the FTSE 250, which climbed 0.7%, or 141 points, to 19,648.

Travel and leisure stocks were the biggest risers, with Cineworld (CINE) soaring 18.2%, or 8p, to 54p and package holiday group Tui (TUI) jumping 7.9% to 471p. Pub and restaurant chain Mitchells & Butlers (MAB) rose 7.5% to 234p and budget airline EasyJet (EZJ) advanced 5.1% to 770p.

TRIG slips on share issue

 

The Renewables Infrastructure Group (TRIG ) slipped 5.2p or 3.9% to 127.2p after it announced a new share issue to replenish its funds after a recent acquisition and investment. At 125p, the new shares are priced 5.6% below Friday’s closing price and a 10.6% premium over its last net asset value at 30 June.

Greencoat UK Wind (UKW ) eased 1.8p or 1.4% to 130.6p after the investment trust and pension funds managed by its fund manager Greencoat Capital bought a 49% stake in the Humber Gateway offshore wind farm from RWE for £648m.

NextEnergy Solar Fund (NESF ) firmed 1.6p or 1.5% to 106.8p after achieving a 4.1% first half total return helped by sunny weather 11% above budget. The 6.7%-yielding renewables fund said it would cut the RPI inflation link to its dividends and warned of a ‘challenging’ outlook for power prices, though it said had fixed 87% of sales for 2nd half.

KKV Secured Loan (KKVL ) jumped 2.5p or 14% to 20.2p after the troubled debt fund hiked loss provisions from £116.7m to £214m in its £341m portfolio.

Sirius Real Estate (SRE ) advanced 4.7p or 5.6% to 88.2p after lifting net asset value by 5% and dividends by 2.8% in the six months to 30 September. The German business park investor said ‘business confidence in the robust and efficient way in which the German government has deal with the pandemic’ had helped its progress.

 

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