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FTSE 100 closes higher as traders focus on EU talks; Wall Street finds its way to positive territory

  • FTSE 100 up 42 points
  • Wall Street in the green
  • More parts of England to enter tier 4

5.10pm: EU trade optimism outweighs lockdown woes

The FTSE 100 ended Wednesday up 42 points, 0.7%, at 6,495 and the FTSE 250 finished 347 points higher, 1.7%, at 20,297.

“Increased chatter that the UK and the EU will reach a trade deal has boosted sentiment,” CMC Markets UK analyst David Madden wrote Wednesday. “Equity markets were already up on the session in advance of the optimism surrounding the trade talks, so then the bullish move was turned up a notch. The Covid-19 crisis is still very much in the news but for now traders are fixated on the UK-EU situation.”

Transport stocks did well, particularly easyJet plc (LON:EZJ), which picked up 7% to £832.

In the US, the Dow rose 226 points, 0.8%, to 30, 2422 just after noon ET. The Nasdaq Composite, despite some early struggles, clawed its way back to gain less than a point to 12,807, and the S&P 500 was 18 points higher, 0.5%, to 3,705.

“The mood is a little subdued in the US as it seems there is a holdup on the $900 billion coronavirus stimulus package,” Madden wrote. “The lower and upper houses of government have voted in favour of the $900 billion scheme but President Trump has indicated he will not support the plan. It is understood that Mr Trump is keen for a package that includes a $2,000 stimulus payment, while the current proposal allows for a $600 payment.”

3.35pm: England tiered restrictions reshuffle

FTSE 100 jumped 19 points to 6,472 not long before close.

Health secretary Matt Hancock has announced that more regions in England will enter tier 4 on Boxing Day – Sussex, Oxfordshire, Suffolk, Norfolk and Cambridgeshire, those parts in Essex subject to lighter restrictions, Waverley in Surrey, and Hampshire.

Bristol, Gloucestershire, Somerset, Swindon, the Isle of Wight, the New Forest and Northamptonshire, Cheshire and Warrington will enter tier 3.

Cornwall and Herefordshire will move to tier 2.

3.25pm : Proactive North America headlines:

Helix BioPharma Corp (TSE:HBP) (OTCMKTS:HBPCF) (FRA:HBP) closes divesture of Polish subsidiary

NexTech AR Solutions Corp (OTCQB:NEXCF) (CSE:NTAR) (FRA:N29)  introduces Genie in a Bottle hologram marketing program for TruLyfe supplements

Todos Medical Ltd (OTCQB:TOMDF) to supply Natural Wellness Clinics with COVID-19 testing products in Kentucky

Victory Resources Corporation (CSE:VR) (OTCMKTS:VRCFF) (FRA:VR62) strikes option deal with Silver Range Resources over ‘promising’ Loner property in Nevada

BetterLife Pharma Inc (CSE:BETR) (OTCQB:BETRF) (FRA:NPAU) adds psychedelic industry leaders to its senior management team following recent takeover of Transcend Biodynamics

Mirasol Resources Ltd (CVE:MRZ) (OTCPINK:MRZLF) (FRA:M8R) rejects “unsolicited expressions of interest” to focus on current business plan

Revive Therapeutics Ltd (CSE:RVV) (OTCMKTS:RVVTF) (FRA:31R) set to hit enrollment goals for Phase 3 coronavirus trial of Bucillamine

ImagineAR Inc (CSE:IP) (OTCQB:IPNFF)  logs best yearly performance in 2020 with record $775,000 in executed contracts

2.45pm: Wall Street starts higher

The main indices on Wall Street started Wednesday’s session on the front foot following a welcome decline in US jobless claims.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.57% at 30,193 while the S&P 500 climbed 0.41% to 3,702 and the Nasdaq rose 0.05% to 12,814.

The higher open followed jobless data for the week to December 19, which showed that 803,000 Americans filed for unemployment benefits, down from 892,000 in the prior week but still at elevated levels suggesting that the economy is still struggling.

Other data also showed that US personal incomes fell 1.1% month-on-month in November while household spending fell 0.4%, providing support for claims by many including Donald Trump that the US$600 stimulus cheques unveiled in the recently agreed spending bill may not be enough to boost a recovery.

Back in London, the FTSE 100 had gained some momentum following the US open and was up 29 points at 6,482 shortly before 2.45pm.

2.20pm: UK mulls tier 4 restrictions on more areas

The Footsie inched higher before the US open and added 5 points to 6,458.

Westminster will review its current COVID-19 restrictions and potentially apply tier 4 measures to more areas in the country.

According to official figures, the reproduction ‘R’ number of the virus in the UK has risen to 1.1-1.3.

Housing Secretary Robert Jenrick said a COVID operations committee is meeting on Wednesday to decide, though there is “absolutely no plan” to change the Christmas rules as they are.

“We don’t have an immediate plan to take action but the number of cases is rising and the variant is spreading to other parts of the country.”

“So, we will see whether it’s necessary to do more, and make sure that the tiered system is sufficiently robust for the new circumstances.”

1.25pm: UK regulator approves self-test kit to identify asymptomatic cases

FTSE 100 got out of the red but was flat at 6,453 in the afternoon.

In the UK, the Medicines and Healthcare products Regulatory Agency issued exceptional use authorization for the NHS Test and Trace COVID-19 Self-Test kit.

The assay can give results in 30 minutes and will be used to identify new cases of COVID-19 in people who do not have symptoms.

The regulator said this device can be used by members of the public with no previous experience of testing, in their own home or another community setting such as a place of work.

12.50pm: Wall Street to open a touch higher

The Footsie was firmly in the red after lunch, shedding 4 points to 6,449.

Meanwhile, US futures are pointing at a green open, with the S&P 500, Dow Jones and Nasdaq to add just a handful of points.

US stocks may experience volatility after Donald Trump pushed the government to give US$2,000 stimulus checks instead of the US$600 as announced.

“The current deal that Congress put together is a band-aid fiscal support solution that keeps unemployment benefits and support for small business lasting till March. Trump wants a substantial coronavirus stimulus package that might make a difference for households,” explained Edward Moya at OANDA.

“Something needs to get done by December 28 and right now markets are expecting that we could see a last-minute tweak that provides more stimulus for Americans. With less than two weeks to the two Georgia Senate runoff races, Republicans do not want to jeopardize Trump’s support ahead of the elections that will determine who controls the Senate.” 


12.05pm: Sterling on the rise

The Footsie trimmed its losses at lunchtime and was down only 1 point to 6,451.

Meanwhile, sterling rose 0.4% to US$1.3424, continuing a fairly steady rise seen over the morning and clawing back some of the ground lost on Tuesday amid Brexit woes.

“The transition period with the EU will end in just over one week and there still isn’t an agreement in place,” said David Madden, analyst at CMC Markets.

“Yesterday it was reported that Michel Barnier, the EU’s chief negotiator, is open to the idea of continuing talks into the New Year. It is understood that Denmark is keen to set this weekend as a deadline for a trade deal, but the French government don’t support the idea.”    

11.40am: AstraZeneca says COVID-19 vaccine should work against new strain

FTSE 100 dipped further before lunch, dropping 15 points to 6,437.

AstraZeneca PLC (LON:AZN) said its COVID-19 vaccine candidate should work against the new strain identified in the UK recently.

“AZD1222 (the candidate) contains the genetic material of the SARS-CoV-2 virus spike protein, and the changes to the genetic code seen in this new viral strain do not appear to change the structure of the spike protein,” the FTSE 100 firm told Reuters late on Tuesday.

“Through vaccination with AZD1222, the body’s immune system is trained to recognise many different parts of the spike protein, so that it can eliminate the virus if it is later exposed.”

Also on Tuesday, Pfizer/BioNTech and Moderna Therapeutics Inc (NASDAQ:MRNA) said they were undertaking tests to figure out whether their jabs are effective on the mutation.

Their vaccines are already approved in certain parts of the world, while AstraZeneca is awaiting approval in the UK as early as next week.

The stock dipped 1% to 7,288p on Wednesday morning.

10.40am: Tesco imposes caps on popular items

The Footsie was little moved in the late morning but remained firmly underwater, down 5 points to 6,447.

Tesco PLC (LON:TSCO) was flat at 220p after reintroducing purchasing limits on the most popular items as it happened during the first COVID-19 lockdown earlier this year.

Customers will only be able to buy up to three boxes of eggs, rice, soap and toiler roll.

The supermarket chain told customers it was to ensure everyone can access these products and invited them to shop alone to avoid crowds, the BBC reported.

The decision comes as 3,000 trucks are stranded in Kent due to travel bans imposed on the UK after the new COVID-19 mutant strain emerged.

9.40am: Tunnel reopens

The Footsie held its losses in mid-morning, shedding 8 points to 6,444.

France has eased restrictions for travelling from and to the UK which were imposed on Sunday in light of the new COVID-19 mutation, which is understood to have originated from England.

French citizens, British nationals living in France and lorry drivers can now travel if they take a test 72 hours before departing.

The Army and the NHS are testing the hauliers that have remained stranded in Kent after the Eurotunnel was closed, which caused thousands of vehicles to be blocked on the road.

The Netherlands and Belgium are also allowing travellers from the UK if they have a negative tests, but another 50 countries, including Italy and India, are still enforcing the ban.

8.55am: The Grinch vs Santa

The FTSE 100 defied early gloomy predictions to open fairly flat on Wednesday, the last full trading session before Christmas.

The index of UK blue-chip stocks opened just 5 points lower at 6,447.94 against predictions for a bigger fall.

Given that a Brexit deal is still hanging in the balance and the UK government’s unerring ability to shoot itself in the foot, there is still scope in later trade for a significant move lower, analysts warned.

Certainly, the warm winter glow from the latest US stimulus programme has largely dissipated with President Trump demanding changes to enacting the bill, including a late US$2,000 stocking filler for American workers.

“Trump was stupid to weigh in at this point in the negotiations – he should’ve made his objections clear earlier on and instructed his Treasury Secretary to press these points,” concludes Marshall Gittler, head of investment research at BDSwiss Group.

“And he was really, really stupid to conflate the pandemic relief bill with the omnibus appropriations legislation.”

On the market, it was a bounce-back day for coronavirus-ravaged travel-related stocks such as IAG (LON:IAG), up 3.2%, and Whitbread (LON:WTB), ahead 2.1%.

British Land (LON:BLND), another lockdown victim, was also well bid early on, with a rise of 2.3% after selling £400mln-worth of offices in London’s West End.

On the FTSE 250, Cairn Energy surged 29% after being awarded US$1.2bn by a tribunal as part of a long-running Indian tax dispute.

Sticking with the sector, there was some good news for Zenith Energy (LON:ZEN), which with an 89% jump was London’s top riser after being selected as the successful bidder for a new 25-year licence to operate the Tilapia oilfield.

Proactive news headlines:

Blue Star Capital PLC (LON:BLU), the investing company with a focus on esports, payments, technology and its applications within media and gaming, has provided an update in respect of its esports portfolio as well as its investee companies – The Drops Esports Inc and Diemens Esports PTY Ltd. The group said that since making its initial £900,000 investment in six esports opportunities in November 2019, Blue Star has invested in total approximately £1,680,000 across seven companies. Follow on investments have been made in Guild Esports PLC, Dynasty eSports Pte Ltd and most recently in FORMATION Esports SaaS. Based on the current valuation of Guild, which was admitted to the standard segment of the London Stock Exchange’s main market on October 2, 2020, and the higher valuation achieved by Dynasty in its subsequent fundraises, Blue Star’s esports portfolio is now valued at £3,715,890, showing an unrealised gain of £2,035,890 and an increase of approximately 120%.

Amryt Pharma Inc (LON:AMYT) (NASDAQ:AMYT) has said therapy AP103 has received an orphan drug designation from the US Food and Drug Administration (FDA) for the condition Dystrophic Epidermolysis Bullosa (DEB). AP103 is based on Amryt’s gene-therapy platform technology and offers a potential treatment for patients with DEB, a subset of EB, Amryt said. Orphan drug status is granted to rare diseases that affect fewer than one in 200,000 people in the US and allows a seven-year period of marketing exclusivity on approval and a waiver of some drug licence fees.

Open Orphan PLC (LON:ORPH) said PrEP Biopharm Limited, in which it owns a 62.6% stake, has completed a 12-week toxicology study for its novel pan-viral prophylactic asset, PrEP-001. The pharma services firm said the animal model study provides safety data needed to move PrEP-001 into longer duration dosing in clinical studies, adding that PrEP Biopharm intends to move forward with a real-world, field trial that is aiming to validate the efficacy of PrEP-001 against all circulating respiratory viruses including coronavirus (COVID-19), influenza and the common cold. PrEP-001 is a synthetic RNA ‘viral mimic’ which is designed to stimulate the body’s innate immune response in the upper respiratory tract to stop respiratory viruses. The treatment candidate is designed to be administered via a once-daily nasal spray.

MaxCyte Inc (LON:MXCT) has said it expects financial results for its core life sciences business to be ahead of schedule, citing momentum in “transformational cell therapies” and milestone payments from licence partnerships. In the same update, the group said it continues to work with the life sciences transactions specialist Locust Walk on a strategy for and future funding of the group’s CARMA business. This subsidiary is developing immuno-oncology drugs using MaxCyte’s cell engineering technology and is aiming to become self-funding.

World High Life PLC (LON:LIFE) (OTCQB:WRHLF) said its subsidiary Love Hemp Limited has launched its 10 SKU Love Hemp product line across 880 Holland & Barrett stores across the UK and Ireland as well as on the retailer’s website. The cannabidiol (CBD) specialist said the 10 SKUS products available include multiple sprays and capsules which contain a variety of strengths from 600 milligrams (mg) CBD to 3,000mg CBD.

Critical Metals Plc (LON:CRTM) said it has “narrowed down its search” to a smaller number of potential acquisition targets that it believes have the potential to produce a combination of cobalt, copper, niobium, tantalum, titanium, or vanadium as the group reported its first financial results as a public listed company. In a statement accompanying its results for the year to June 30, 2020, the chairman of the mining investment firm Russell S. Fryer said preliminary discussions are ongoing with a number of “exciting opportunities” and the company will provide updates on any material developments.

Avation PLC (LON:AVAP) said it has managed to maintain profitability despite a “challenging year” affected by the coronavirus (COVID-19) pandemic and that it is “optimistic about the medium term opportunity for air travel”. In a trading update, the commercial aircraft leasing firm reported a pre-tax profit for the year to June 30, 2020, of US$14.7mln, adding that lease revenue in the period rose by 14% to US$135.3mln. Reporting on its operations from July 1, Avation said it has provided support to 14 of its airline customers during the pandemic with agreements to defer a total of US$13.7mln in lease payments, adding that it has mitigated the impact of this on its cashflow by rescheduling US$26.5mln of loan amortisation. As of December 23, the company said seven airline customers of a total of 19 have returned to normal monthly rental levels.

United Oil & Gas PLC (LON:UOG), the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets, has announced the appointment of Tom Hickey as an independent non-executive director with effect from January 1, 2021. The group noted that Hickey is known across the oil and gas industry and beyond as a significant contributor to the success of Tullow Oil PLC in his role as CFO from 2000-08. During this time he was central to the successful conclusion of major acquisitions and exploration discoveries which helped shape that company into a leading Independent oil and gas exploration and production company. Hickey is currently CEO of Boru Energy Limited, the West African focussed private oil and gas company, which is supported by The Carlyle Group.

Polarean Imaging PLC (LON:POLX) said it has passed another important milestone with confirmation that the US regulator has accepted its new drug application (NDA). The US Food & Drug Administration (FDA) said the review of the company’s drug‑device combination product using hyperpolarised xenon-129 gas to enhance magnetic resonance imaging in pulmonary medicine will follow a “standard time frame”. That means the target Prescription Drug User Fee Act or PDUFA date is October 5, 2021. This is the deadline by which the FDA must review all new drug applications and is traditionally 10 months from submission. In the same announcement, the company confirmed the planned retirement of chief operating officer Ken West, who will continue as a consultant and a non-executive director of Polarean.

Powerhouse Energy Group plc (LON:PHE) said it has noted the recent increase in the company’s share price and confirms that there are no new material developments beyond those previously notified to the market. The company provided an update on operational developments in an announcement last week. Shares in Powerhouse Energy jumped by around 50% on Tuesday to close at 7.65p, having opened trade at 5.00p.

Guild Esports PLC (LON:GILD), a UK-based owner and developer of esports teams said it has received from Andrew Drake, a non-executive director of the company, notice of the exercise of warrants over 1.5 million ordinary shares in the company at an exercise price of 1.00p per share. The aggregate gross proceeds of this exercise are £15,000. The warrants are being exercised within the three-month exercise period, which expires on January 2, 2021. The new ordinary shares will be subject to a 24-month lock-in period from the date of admission, as set out in the company’s prospectus dated September 29, 2020.

Touchstone Exploration Inc. (LON:TXP) has announced that on December 22, 2020, certain executive officers exercised share options representing a total of 700,000 common shares of no par value in the company, which were set to expire on January 7, 2021. As part of this exercise, Touchstone president and chief executive officer Paul R. Baay exercised share options representing 300,000 common shares, chief financial officer Scott Budau exercised share options representing 200,000 common shares, and chief operating officer James Shipka exercised share options representing 200,000 common shares, all at a price of C$0.33 (approximately 1p) per common share. Further, on December 22, 2020, Baay sold 300,000 common shares, Budau sold 200,000 common shares and Shipka sold 200,000 common shares at a weighted average price of C$2.01 (approximately 117p) per common share on the Toronto Stock Exchange.

6.35am: Footsie called lower 

The FTSE 100 is expected to open lower on Wednesday morning as traders contend with yet more uncertainty on both sides of the Atlantic on the last full trading day before Christmas.

Spread-better IG expects the UK blue chip imdex to open down 22 points after ending Tuesday’s session 37 points higher at 6,453.

Despite an initial bounce earlier this week following news that the US Congress has passed a US$900bn stimulus package, the fate of the measures was thrown into doubt overnight after lame duck president Donald Trump threatened to veto the bill, saying the direct payments of US$600 to American citizens are too low and provisions in the spending package for foreign aid and other areas are too high.

As around US$1.4 trillion in government funding is also attached to the bill, a Trump veto could force the US government to shut down on December 28 if legislators cannot override his veto with a two-thirds vote in both houses of Congress, making managing the ongoing coronavirus pandemic and associated economic crisis even more difficult.

The news of Trump’s outburst followed a mixed session on Wall Street overnight, with the Dow Jones Industrial Average closing down 0.67% at 30,015, while the S&P 500 fell 0.21% to 3,687. The Nasdaq Composite was the positive outlier, rising 0.51% to close at a record high of 12,807.

Asian markets were also positive on Wednesday morning, with Japan’s Nikkei 225 up 0.33% while Hong Kong’s Hang Seng rose 0.52%.

Meanwhile, on this side of the pond Brexit negotiations are once again going into overtime in a final bid to break a deadlock over a trade deal before the transition period ends in just over a week. However, it has also been suggested that talks could continue into the new year if necessary, although this would require a transition extension which so far the UK has refused to consider publicly. 

Fishing, dispute resolution and competition rules remain key sticking points in the negotiations, with any breakthroughs or pitfalls likely to cause movement for the pound.

Around the markets:

  • Sterling: US$1.34, up 0.3%
  • Brent crude: US$49.30 a barrel, down 1.56%
  • Gold: US$1,864 an ounce, up 0.1%
  • Bitcoin: US$23,542, up 4.2%

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