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FTSE 100 closes firmly ahead as vaccine hopes boost risk appetite

FTSE 100 index closes up 1.83%
Apple wins in EU court
OPEC+ meeting on production cuts today

5pm: F..

  • 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

Minera Alamos Inc (CVE:MAI) (OTCMKTS:MAIFF) on track to complete Santana gold mine construction; strengthens board with experienced mining enginee

Nextleaf Solutions Ltd (CSE:OILS) (OTCQB:OILFF) wins patent for THC-enhancing prodrug THC-O-Acetate

Dyadic International Inc (NASDAQ:DYAI) to collaborate with top-five pharma company on therapeutic compounds

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

Exro Technologies Inc (CSE:XRO) (OTCQB:EXROF) partners with Australia's SEA Electric to improve electric powertrain technology in heavy-duty vehicles

WeedMD Inc (CVE:WMD) (OTCQX:WDDMF) posts record revenue of C$12.2 million in first quarter as it sees benefit of Starseed deal

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 Atlantics successful endeavour to secure a £1.2bn rescue deal.

Elsewhere, Apple Inc (NASDAQ:AAPL) won against the European Union after the blocs 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 todays 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 Modernas 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.

The jab, which will be mass-produced by AstraZeneca PLC (LON:AZN), is stimulating both antibodies and T-cells, which kill the virus. It is one of the few vaccine projects producing this twin effect.

“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.

In the junior market, ASOS PLC (LON:ASC) dipped 3% to 3,276.75p despite flagging high demand for lockdown products which drove sales up 9% in the four months to June 30.

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 taxpayers 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.

BT Group PLC (LON:BT.A) dipped 2% to 113.55p on woes related to the Huawei ban announced by Westminster on Tuesday night.

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 didnt 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 Asias 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 FIAs 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.

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