2nd Dec 2020 08:44
(Alliance News) -Â Stocks took a pause on Wednesday after a stellar start to the month, despite the UK government approving Pfizer and BioNTech's coronavirus vaccine.
The FTSE 100 index was just 0.32 of a point lower at 6,384.41 early Wednesday. The blue-chip index had closed up 1.9% on Tuesday.
The mid-cap FTSE 250 index was down 100.54 points, or 0.5%, at 19,744.27 on Wednesday. The AIM All-Share index was down 0.1% at 1,064.17.
The Cboe UK 100 index was down 0.2% at 635.56. The Cboe 250 was down 0.5% at 17,070.04, while the Cboe Small Companies was up 0.3% at 11,496.46.
In mainland Europe, the CAC 40 in Paris was down 0.4% while the DAX 30 in Frankfurt was down 0.5% early Wednesday.
"The equity market rally, which is fuelled by vaccine hope, is taking a breather today. Basically, investors are trying to place their bets more carefully as the global equity markets recorded a record month. But traders do know that there is still a lot more upside left for equities," said Naeem Aslam at AvaTrade.
At the top of the FTSE 100 were jet engine maker Rolls-Royce Holdings, up 1.7%, and British Airways parent International Consolidate Airlines, up 1.5%.
The UK government on Wednesday said it has authorised Pfizer and BioNTech's Covid-19 vaccine, becoming the first country in the world to give the jab the green light.
Pfizer said the approval marked a "historic moment" in the fight against Covid-19.
The UK vaccine approval comes as a strengthened tiered system of coronavirus restrictions replaced England's second national lockdown on Wednesday.
The BioNTech/Pfizer shot and another one being developed by US firm Moderna have taken the lead in the global chase for a vaccine, after large-scale trial data in November showed that their jabs were around 95% effective against Covid-19.
Pfizer and BioNTech on Wednesday said they expect further regulatory decisions across the globe "in the coming days and weeks" and are ready to deliver vaccine doses.
Fiona Cincotta commented: "Despite the weaker start, good news was still aplenty after the UK approved the Pfizer covid vaccine meaning that the rollout of the jab will begin next week. Vaccine developments have been the driving force behind November's stellar performance given that a Covid vaccine is the surest and quickest route to returning to pre-pandemic growth levels."
In Asia on Wednesday, the Japanese Nikkei 225 index ended up 0.1%. Against the yen, the dollar edged up to JPY104.57 versus JPY104.40 late Tuesday.
In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong ended down 0.1%.
Back in London, Tesco shares were down 0.9% after the grocer decided to repay GBP585 million of business rates relief received due to Covid-19.
The supermarket said it is "immensely grateful" for the support provided by the government of the UK, describing it as a "game-changer" which ensured customers got access to the essentials they needed.
Tesco said all the funds from rates relief has been spent on its response to the pandemic - noting that its latest estimate was that Covid-19 would cost the company GBP725 million this year, above the business rates relief received.
"This action may also throw down the gauntlet to some of its blue chip rivals, resulting in some other companies potentially following suit," said Richard Hunter, head of markets at Interactive Investor.
J Sainsbury was down 3.2% in early trade and Wm Morrison down 1.1%.
G4S shares were up 7.3% at 246.50 after receiving an increased bid from suitor GardaWorld.
GardaWorld declared an increased and final cash offer of 235 pence per share for G4S, valuing the London-listed security services firm at GBP3.68 billion.
G4S shares had closed at 229p in London on Tuesday.
In September, the board of the FTSE 250-listed firm rejected Montreal-based GardaWorld's cash offer, saying it undervalued the company. However, in October, GardaWorld directly approached G4S shareholders with the same GBP3 billion offer.
And in November, the directors of G4S rejected a GBP3.25 billion bid from Allied Universal, again stating that it undervalued the business. The "at least" 210p per share bid did, however, give Allied Universal the edge over Canadian rival GardaWorld, whose bid had been 190p.
GardaWorld President & CEO Stephan Cretier on Wednesday said: "G4S has been steadily weakened by a senior management team which has destroyed nearly £1 billion of value in the last seven years, wasted hundreds of millions on restructuring programmes that do nothing for margins and chased an unsustainable dividend policy fuelled by debt and disposing of assets on the cheap."
The euro traded at USD1.2052 early Wednesday, higher than USD1.2045 late Tuesday.
Sterling was quoted at USD1.3369 early Wednesday, down against USD1.3425 at the London equities close on Tuesday.
Gold was quoted at USD1,816.35 an ounce early Wednesday, higher than USD1,811.03 on Tuesday. Brent oil was trading at USD47.36 a barrel, flat on USD47.23 late Tuesday.
The members of the OPEC oil producers cartel decided Tuesday to delay by two days talks with their allies over a possible extension to output cuts to support the pandemic-stricken market.
An OPEC source told AFP that while the 13 members of OPEC proper may continue informal discussions on Tuesday, no formal ministerial conference along the lines of that on Monday was planned. The organisation confirmed that the meeting of the broader OPEC+ grouping – which includes Russia – had been delayed to Thursday at 1300 GMT.
Cartel members had failed to reach agreement on Monday after around four hours of videoconference talks.
The economic events calendar on Wednesday has eurozone unemployment data at 1000 GMT and US ADP employment change figures at 1315 GMT.
By Lucy Heming;Â [email protected]
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