London open: Stocks edge lower as Covid vaccine hopes fade
London stocks edged lower in early trade on Wednesday as investors mulled the latest UK inflation data and as disappointment set in over a potential coronavirus vaccine.
At 0830 BST, the FTSE 100 was down 0.2% at 5,990.55.
Spreadex analyst Connor Campbell said: "Unwilling to learn from past mistakes, the markets got overly excited about Moderna’s Covid-19 vaccine, only for the Dow Jones’s optimism to be somewhat punctured on Tuesday night.
"A report from Boston Globe Media’s STAT news cast doubt on the success of Moderna’s vaccine trials, not because they necessarily were a failure, but because the company failed to provide the ‘critical information’ to allow the rest of the scientific community to assess the vaccine’s efficacy.
"This tamping down of expectations caused the Dow to drop close to 400 points on Tuesday, just less than half of the 1000-point growth seen on Monday. The Dow’s decline fed into the European session, contributing to the smattering of losses seen after the bell."
Campbell said the FTSE would probably haven fallen further if it weren’t for sterling declining 0.4% against the dollar and the euro. "This as the UK’s inflation fell from 1.5% in March to just 0.8% in April, the lowest figure since August 2016," he said. "Energy prices were one of the most significant drags, with food prices also falling slightly; fast food and toys, on the other hand, saw prices increase as customers look for at-home distractions."
In equity markets, Rolls-Royce lost ground after saying would cut at least 9,000 jobs as part of a plan to save more than £1.3bn a year in response to the Covid-19 crisis. The engine maker said the job cuts from its global workforce of 52,000 would mainly affect the civil aerospace business and that it would review the division's facilities.
On the upside, Experian rallied after it left its dividend unchanged as the information services company said the coronavirus crisis and currency swings could reduce first-quarter revenue by up to 15%.
AstraZeneca pushed higher as it said the US Food and Drug Administration has approved its and Merck & Co’s Lynparza as a treatment for a form of prostate cancer.
William Hill gained after saying it could receive a UK tax refund of between £125m and £150m after being overcharged VAT on its FOBT machines in betting shops.
Food and clothing retailer Marks & Spencer was up even after it said full year profits fell by a fifth as it took a £218m hit from the Covid-19 impact and said no dividend would be paid in 2020/21. The company reported pre-tax profits of £67.2m, down 20% including adjusting items of £335.9m, with £212.8m for costs and stock write downs for Covid-19.
Market Movers
FTSE 100 (UKX)5,990.55-0.19%
FTSE 250 (MCX)16,270.76-0.30%
techMARK (TASX)3,671.54-0.36%
FTSE 100 - Risers
Experian (EXPN)2,606.00p3.33%
AstraZeneca (AZN)8,788.00p1.29%
Fresnillo (FRES)818.80p0.76%
Polymetal International (POLY)1,722.50p0.67%
Relx plc (REL)1,851.00p0.54%
M&G (MNG)122.05p0.49%
Hikma Pharmaceuticals (HIK)2,478.00p0.45%
Rightmove (RMV)505.40p0.44%
Smith & Nephew (SN.)1,620.50p0.43%
GlaxoSmithKline (GSK)1,667.40p0.41%
FTSE 100 - Fallers
Evraz (EVR)252.00p-4.11%
Carnival (CCL)970.00p-3.15%
Meggitt (MGGT)268.00p-2.72%
Royal Bank of Scotland Group (RBS)104.15p-2.34%
International Consolidated Airlines Group SA (CDI) (IAG)199.00p-2.21%
Rolls-Royce Holdings (RR.)262.40p-1.94%
RSA Insurance Group (RSA)365.10p-1.72%
easyJet (EZJ)538.00p-1.68%
Barratt Developments (BDEV)495.00p-1.67%
Lloyds Banking Group (LLOY)29.10p-1.64%
FTSE 250 - Risers
William Hill (WMH)131.80p8.03%
Marks & Spencer Group (MKS)89.90p4.78%
Rank Group (RNK)141.60p4.12%
PayPoint (PAY)694.00p3.43%
Network International Holdings (NETW)430.00p2.63%
Weir Group (WEIR)1,008.00p2.52%
C&C Group (CCR)189.20p1.72%
BlackRock World Mining Trust (BRWM)345.50p1.62%
Euromoney Institutional Investor (ERM)729.00p1.25%
Pets at Home Group (PETS)242.60p1.08%
FTSE 250 - Fallers
TBC Bank Group (TBCG)732.00p-3.56%
Contour Global (GLO)165.00p-3.51%
Renishaw (RSW)3,834.00p-3.03%
Kainos Group (KNOS)800.00p-3.03%
Edinburgh Worldwide Inv Trust (EWI)233.00p-2.92%
QinetiQ Group (QQ.)297.60p-2.75%
Hammerson (HMSO)63.02p-2.66%
Victrex plc (VCT)1,912.00p-2.65%
Wood Group (John) (WG.)189.05p-2.60%
Computacenter (CCC)1,550.00p-2.45%