24th Aug 2020 12:02
(Alliance News) - Stocks in London were higher at midday on Monday on hopes for a coronavirus treatment, with the Republican National Convention underway as US President Donald Trump gets set to face Joe Biden in November's election.
US authorities announced on Sunday an emergency authorisation for doctors to use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed over 176,000 in the US.
The move by the US Food & Drug Administration comes as Trump faces intense pressure to curb the contagion that has impaired the world's largest economy and dimmed his prospects for re-election in November.
The plasma is believed to contain powerful antibodies that can help fight off the disease faster and help protect people from being seriously hurt by it.
In London, the blue-chip FTSE 100 index was up 105.67 points, or 1.7%, at 6,107.56. The mid-cap FTSE 250 index was up 106.61 points, or 0.7%, at 17,684.29. The AIM All-Share index was up 6.15 points, or 0.3% at 963.11.
The Cboe UK 100 index was up 1.9% at 607.69. The Cboe 250 was up 0.9% at 15,057.68, and the Cboe Small Companies was down 0.4% at 9,538.65.
In mainland Europe, the CAC 40 index in Paris was up 2.2%, while the DAX 30 in Frankfurt was up 2.1%.
IG Group's Josh Mahony said: "European markets have kicked off the week in style, with the FDA's decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long. With the US election looming large for Donald Trump, we are likely to continue seeing a proactive approach from the president as he seeks to expedite the provision of treatments and vaccines in a bid to overcome this virus before the polls open in November.
"With markets seemingly fearful of what a Biden presidency could bring, the gains we are seeing today are partially a response to the possibility of a second term for Trump."
In the FTSE 100, BT was the best performer, up 5.6% following a weekend press report from Sky News that the former UK state monopoly put investment banks on high alert to fend off potential takeover approaches.
Sky News reported that BT had contacted Goldman Sachs Group to update its bid defence strategy in recent weeks.
So far, BT has not received any formal approaches according to the article.
BT's market value stands at around GBP10.67 billion, with its share price having fallen to an 11-year low earlier of 94.77p this month.
BT shares have come under pressure having suspended its dividend earlier this year for the first time since its privatisation over 30 years ago, as it grappled with the coronavirus outbreak.
Analysts at the Share Centre said: "This speculation in some ways justifies current investor's belief that the company is undervalued but its current organisational structure suggests the share price will not appreciate to fair valuation anytime soon. The view among some is that if BT is to become a private company it may be easier to restructure and unlock value than as a listed business.
"This does not help long-suffering retail investors much, but this speculation may help in establishing a floor to BT's share price and may give more impetus for management, and even the government/regulators in helping BT achieve that restructuring that is much needed."
AstraZeneca was up 3.6% after the Financial Times reported on Sunday that Trump is considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK.
The Trump administration is considering options which include allowing the US Food & Drug Administration to award an emergency use authorisation in October to a vaccine being developed by AstraZeneca and Oxford university, should results from a study being carried out prove successful. The Oxford vaccine is among a handful globally to have reached the Phase 3 stage.
Bunzl was up 3.1% after the distribution and logistics firm said it delivered a resilient performance in the first half despite the unprecedented challenges posed by the Covid-19 pandemic.
For the half-year to June 30, revenue rose 7.0% to GBP4.85 billion from GBP4.53 billion last year, and pretax profit was up 22% to GBP245.4 million from GBP200.5 million.
Bunzl raised its interim dividend 1.9% to 15.8 pence from 15.5p paid out last year and also reinstated a previously skipped dividend. As a result of the better-than-expected trading performance during the first half of the year, Bunzl decided to reinstate and pay the final dividend for 2019 at the same level as originally proposed of 35.8p.
Bunzl said that, as it is no longer possible for this dividend to be approved by shareholders at the annual general meeting, it will be paid as an additional interim dividend in November.
At the other end of the large caps, British Airways parent International Consolidated Airlines was the worst performer, down 2.5%, amid continuing pressure on the travel sector.
More than 90,000 jobs have been lost or placed at risk across the wider travel sector since the coronavirus crisis started, the association of travel agents and tour operators has said.
Abta has written to UK Chancellor of the Exchequer Rishi Sunak asking for a package of measures to support businesses and employees before thousands more jobs are lost. It is calling on the government to adopt a "regionalised" approach to quarantine rules and use the Autumn budget to announce an air passenger duty holiday covering summer 2021 to incentivise people to book holidays.
The travel association warned that the job situation in the industry had reached a "critical point" with measures to control the pandemic affecting the market.
Pearson shares were flat. The education publisher said it appointed Non-Executive Director Andy Bird as its new chief executive to replace the outgoing John Fallon, who had announced his departure in December.
Bird will assume the role on October 19, and Fallon will continue as CEO until that date. Bird joined the education publisher in May. He spent 14 years at Walt Disney Co and was chair of Walt Disney International.
The pound was quoted at USD1.3120 Monday midday, up from USD1.3090 at the London equities close Friday.
The euro was priced at USD1.1836 Monday midday, up from USD1.1785 late Friday. Against the yen, the dollar was quoted at JPY105.74 in London, lower from JPY105.89.
In commodities, Brent oil was trading at USD44.63 a barrel Monday midday, up from USD43.84 on Friday evening. Gold was quoted at USD1,949.46 an ounce, firm from USD1,941.70.
New York is set to continue its positive momentum after the S&P 500 and Nasdaq Composite indices ended at record highs on Friday.
The Dow Jones Industrial Average was called up 0.9%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.8%, based on futures trading.
On the political front, Republicans are ready to formally nominate Trump for re-election at a scaled-down convention kick-off in Charlotte that begins a week-long effort to convince voters that the president deserves a second term.
Trump will draw on all his showman's instincts at the Republican convention starting Monday to get Americans to look beyond his handling of the coronavirus crisis and return him to the White House for a second term.
Facing anger over the pandemic and ensuing economic turmoil, Trump badly trails his Democratic opponent Biden in the polls.
But the Republican insists he can replicate his surprise 2016 win and hopes the convention, where he will be nominated to seek re-election November 3, will launch the comeback.
Due to Covid-19, the convention will be largely online, the same as the Democrats' unprecedented convention last week. But technical aspects will be only the start of the tradition-wrecking changes brought to the Trump party.
Unlike standard conventions, where the candidate stays mostly out of the way until the last night, Trump is expected to be in the limelight all four days.
His family, which has had a conspicuous amount of influence and access at the White House during his tumultuous first term, will also be present. Speeches expected from all Trump's adult children, including the reclusive Tiffany Trump - who hasn't made a public speech since the 2016 Republican National Convention.
By Arvind Bhunjun; [email protected]
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