20th Aug 2021 07:51
(Alliance News) - Stocks in London are called flat on Friday after Wall Street staged a small comeback on Thursday, but Asian markets suffered steep losses after a new move by the Chinese government to crack down on the tech sector.
In early UK corporate news, AstraZeneca reported positive results for its Covid antibody cocktail, Morrisons prefers the return of a previous bidder, and Marks & Spencer has started its new year with encouraging sales.
IG futures indicate the FTSE 100 index is to open down 1.16 points at 7,057.70 on Friday. The blue-chip index closed down 110.46 points, or 1.5%, at 7,058.86 on Thursday.
Stocks in New York ended mixed on Thursday recovering from steep early losses, on a day that saw investors grapple with hawkish signals from the US Federal Reserve minutes and positive jobless claims figures.
The Dow Jones Industrial Average lost 0.2% and the S&P 500 shed 0.1%, but the Nasdaq Composite finished 0.1% higher.
The mood in the US was improved after President Joe Biden's administration announced steps on Thursday to allow US states to continue expanded unemployment benefits as the country grapples with a surge in the Delta variant of Covid-19, even as data showed jobless claims declined for a fourth straight week.
Congress approved a massive expansion of the unemployment safety net as the pandemic began last year, but after repeated extensions the programs are due to expire nationwide early next month.
States will be able to use money left over from the USD1.9 trillion American Rescue Plan approved in March to continue some of the jobless programs, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said in a letter to top lawmakers.
In Asia, however, the mood was more sour.
In Tokyo, the Nikkei 225 index closed down 1.0% on Friday. In China, the Shanghai Composite was 1.4% lower, while the Hang Seng index in Hong Kong was down 1.7%. The S&P/ASX 200 in Sydney ended down 0.1%.
Stocks in Asia were unable to track the small gains seen in the US, with Beijing further tightening its grip on the tech sector.
China passed a sweeping privacy law aimed at preventing businesses from collecting sensitive personal data, as the country faces an uptick in internet scams, leaks and concerns about tech giants abusing clients' personal information.
Under the new rules passed by China's top legislative body on Friday, state-run and private companies handling personal information will be required to reduce data collection and obtain user consent.
The Chinese state security apparatus will maintain access to swathes of personal data, however, and Beijing has long been accused of harnessing big tech to accelerate repression in the northwestern Xinjiang province and elsewhere.
The new rules are expected to further rattle China's tech sector, with companies such as ride hailing giant Didi and gaming behemoth Tencent in regulators' crosshairs in recent months over misuse of personal data.
The law aims to protect those who "feel strongly about personal data being used for user profiling and by recommendation algorithms or the use of big data in setting [unfair] prices," a spokesman for the National People's Congress told state news agency Xinhua earlier this week.
In the UK, AstraZeneca said "positive" results from its Provent Phase III trial show its AZD7442 treatment "achieved a statistically significant reduction in the incidence of symptomatic Covid-19, the trial's primary endpoint."
AZD7442, Astra noted, is a combination of two long-acting antibodies. It reduced the risk of developing symptomatic Covid-19 by 77% compared to a placebo.
The trial accrued 25 cases of symptomatic Covid-19 at the primary analysis, and pointed to no cases of severe Covid-19 or Covid-19-related deaths in the trial, versus two deaths from the placebo.
"AZD7442 is the first antibody combination, non-vaccine, modified to potentially provide long-lasting protection that has demonstrated prevention of Covid-19 in a clinical trial," Astra said.
Private equity firm Clayton, Dubilier & Rice late Thursday announced a new GBP7 billion bid for supermarket Wm Morrison Supermarkets.
The deal has been unanimously accepted by the board of the grocer and directors have said shareholders should vote in favour of the takeover at a meeting due in early October.
It means the company has withdrawn its recommendation for investors to accept a previous GBP6.7 billion takeover deal from a consortium led by Softbank-based private equity firm Fortress.
Fortress on Friday asked Morrisons shareholders to take no action on the new CD&R bid.
Last week, CD&R was given an extended deadline until this afternoon by takeover regulators to say whether it wants to make a new offer for Morrisons, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential GBP5.5 billion bid. In June, the board said the offer "significantly undervalued Morrisons and its future prospects". Since then CD&R has been pondering whether it should increase its bid for the supermarket chain.
Fellow UK retailer Marks & Spencer said it has made a strong start to its financial year that began on April 4, with improving sales and profit.
M&S said the easing of restrictions has led to an "encouraging" performance.
In the 19 weeks to August 14, total revenue was up 29% from a year ago, and up 4.4% on the same period in financial 2020, meaning two years ago and before the pandemic began.
This has been led by an outperformance in Food sales, which are up 11% on a year ago and up 9.6% on two years ago, with retail park locations trading strongly.
Clothing & Home sales are up 92% year-on-year, but are still 2.6% below financial 2020.
"The change in our approach to trading, including more focussed ranges, fewer promotions and a substantially smaller summer sale, has resulted in full price sales up about 9% on financial 2020," M&S explained.
Looking ahead, M&S expects adjusted pretax profit at the upper end of its guided range of GBP300 million to GBP350 million.
"Although there has likely been an element of pent-up consumer demand in trading to date, we believe this performance provides strong confirmation of the beneficial effects of the last 18 months 'Never the Same Again' changes," the retailer added.
Irish building materials firm Kingspan reported a "remarkably strong" first half, with revenue surging on the back of high demand.
Pretax profit in the six months to June 30 rose to EUR297.5 million from EUR177.5 million a year before, with trading profit up 64% to EUR329 million.
Revenue increased 41% year-on-year to EUR2.92 billion from EUR2.07 billion.
Kingspan returned a 19.9 euro cents dividend in the first half, after withholding payment last year.
"Despite inflation in our input costs, effective price management has helped increase trading margins, with a stand out performance in our largest division - insulated panels. Our strategy of expanding through acquisition and diversifying geographically has continued, with ten acquisitions made during the period across four continents, and a robust balance sheet positioned to support future growth," Chief Executive Gene Murtagh said.
The pound was quoted at USD1.3618 early Friday, down from USD1.3666 at the London equities close Thursday. The euro was priced at USD1.1682, flat from USD1.1685.
Against the Japanese yen, the dollar was trading at JPY109.69, soft from JPY109.75.
Brent oil was quoted at USD66.68 a barrel Friday morning, up from USD66.10 late Thursday. Gold was trading at USD1,786.70 an ounce, up against USD1,781.65.
By Paul McGowan; [email protected]
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