UK equity markets continued to drift lower on Tuesday. The blue chip FTSE 100 index fell 1.2% to 7,024, and its mid-cap FTSE 250 index counterpart lost 0.9% at 22,556.
Markets continue to exercise caution regarding the potential impacts of the new Covid variant Omicron. Sentiment weakened after Moderna chief executive Stephane Bancel cast doubts over the efficacy of existing vaccines against the coronavirus variant.
Expectations of an interest rate rise at the next monetary policy meeting on 16 December have already diminished in the wake of the new Covid variant.
MARKET NEWS
Pharmaceutical leviathan AstraZeneca (AZN) announced its supplemental new drug application for Lynparza had been accepted and granted priority review in the US to treat patients with early breast cancer.
Lynparza is used to treat patients with early breast cancer who have already received chemotherapy.
The supplemental new drug application was based on results from the Olympia phase 3 trial, which showed that Lynparza demonstrated a ‘statistically significant and clinically meaningful improvement in invasive disease-free survival, reducing the risk of invasive breast cancer recurrence, second cancers or death by 42% versus placebo,’ the company said. Unfortunately the direction of the share price was influenced more by investors worrying that AstraZeneca might not earn as much from its existing Covid vaccine given the comments from Moderna’s CEO, leaving the stock trading 1.3% lower at £82.66.
Shares in low cost airline EasyJet (EZJ) fell nearly 3% to 489p after the group delivered an annual loss. On a more optimistic note, it reported good levels of second-half bookings.
For the year ending 30 September 2021, pre-tax losses narrowed to £1.04 billion from £1.27 billion a year earlier, while revenue slumped 52% to £1.46 billion.
The company said that while it was too soon to say what impact Omicron may have on European travel, it had seen an increase in transfers with some softening of trading for its first quarter.
Capacity in Q1 was expected to be about 65% of FY19, and 70% of FY19 capacity for Q2
Shares in online gambling company 888 (888) drifted 2.3% lower to 316.4p despite announcing that it had received all necessary clearances for its takeover of William Hill’s international business. The deal is expected to complete in the first quarter of next year. The group has reiterated its intention to raise approximately £500 million via a capital raise.
Water and waste services company Pennon (PNN) increased its dividend in response to a rise in interim pre-tax profits for the six months to the end of September. Pre-tax profits rose 4.3% to £90.4 million, and revenue jumped by 22% to £389.3 million. The interim dividend was increased by 4.9% to 11.7p. Shares drifted by 0.16% to 1224p.
Business software group Micro Focus International (MCRO) announced a $500 million cost cutting initiative. The group has set a medium term growth target of 1% to 2%. Revenue is anticipated to decline by 5% in 2021 and to be flat or better by the end of 2023, which disappointed the market and triggered an 8.3% decline in the share price to 345p.
Media group Future (FUTR) upgraded its outlook after reporting that annual profit more than doubled amid ongoing margin expansion. For the year ended 30 September 2021, pre-tax profit jumped 107% to £107.8 million year-on-year as revenue increased 79% to £606.8 million.
‘The growth was accelerated in the US and we are confident about our ability to capitalise on the opportunity in North America, to further strengthen and diversify our revenue streams,’ it added. Shares rallied by 15.9% to 3702p.
