Vac­cine hope in­jects some buoy­ancy

The Daily Telegraph - Business - - Business -

HOPES of progress on a Covid-19 vac­cine boosted global mar­kets on Wed­nes­day, send­ing Euro­pean eq­ui­ties sharply higher.

A buoy­ant mood at the open grew af­ter ITV re­ported “pos­i­tive news” is com­ing on the vac­cine un­der de­vel­op­ment at Oxford Univer­sity, where re­search is be­ing con­ducted in con­junc­tion with As­traZeneca.

The broad­caster’s po­lit­i­cal ed­i­tor, Robert Pe­ston, said the un­der­de­vel­op­ment vac­cine “is gen­er­at­ing the kind of an­ti­body and T-cell (killer cell) re­sponse that the re­searchers would hope to see”.

The FTSE 100 pharma gi­ant’s shares popped higher fol­low­ing the re­port, end­ing the day up 447p at £89.96.

The chunky rise for Lon­don’s most valu­able listed com­pany put a strong up­wards pull on the blue-chip in­dex, with only a hand­ful of groups los­ing ground.

Euro­pean travel stocks reached a three-week high, led by gains for Bri­tish Air­ways-owner In­ter­na­tional Con­sol­i­dated Air­lines, which pushed up 22.2p to 229.3p on op­ti­mism about vac­cine tri­als. On the FTSE 250, fel­low air­line easyJet also jumped, ris­ing from 41.6p to 691.6p. At the other end of the FTSE 100 was Burberry. The lux­ury goods re­tailer was the stand­out poor per­former among blue chips, drop­ping 87.5p to £14.70 af­ter it re­ported a 45pc sales drop in the three months to the end of June and an­nounced job cuts.

Royal Bank of Canada’s Pi­ral Dad­ha­nia said the pan­demic has put Burberry in an un­en­vi­able po­si­tion, adding: “Brand heat is im­prov­ing, but we are un­sure that it is strong enough to take mar­ket share from the sec­tor win­ners.”

Among mid-caps, fur­ni­ture and home­wear re­tailer Dunelm rose 29p to £11.75 de­spite warn­ing its full-year pre-tax profit will take a hit due to the lock­down, de­spite a re­cent re­cov­ery in sales.

The FTSE 250 group said to­tal sales rose 20pc in June, hav­ing fallen as much as 78pc in April. A surge in on­line sales, which were up 106pc over the quar­ter, wasn’t enough to off­set the drop caused by store clo­sures. Citi’s Matthew Gar­land said Dunelm faces un­cer­tainty and cost head­winds.

Shares in Dixons Car­phone fell sharply af­ter an­a­lysts warned the elec­tri­cals re­tailer faces a tough road ahead. A drop of 8.1p to 78.4p left it as the FTSE 250’s worst per­former.

The group scrapped its div­i­dend af­ter fall­ing to a £140m an­nual loss for the 12 months to the start of May as lock­down weighed on mo­bile phone sales and forced its stores to close.

Royal Bank of Canada’s Richard Cham­ber­lain said Dixons has a rel­a­tively strong mar­ket po­si­tion, but said the out­look for big-ticket pur­chases “look chal­leng­ing”.

Else­where, shares in on­line fash­ion re­tailer Asos pushed higher af­ter the group said it an­tic­i­pates prof­its this year will land at the top end of mar­ket ex­pec­ta­tions.

The group said sales rose 10pc over re­cent months, pick­ing up as lock­downs rolled back across Europe – but its UK and US sales fell. Liberum’s Wayne Brown said the group’s rel­a­tively muted per­for­mance com­pared to ri­vals such as Boohoo and Za­lando “high­lights the chal­lenges of whole­sale model where lead times are long and cap­i­tal is tied up in in­ven­tory makes it dif­fi­cult to quickly change the prod­uct mix”. The fast fash­ion group’s shares rose 116p to £34.89.

louis ash­worth

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