Admiral pre-tax profits rise, AstraZeneca sees positive progress with two drugs
London open
The FTSE 100 is expected to open 16 points higher on Wednesday, having closed up 0.33% at 7,250.90 on Tuesday.
Stocks to watch
Insurer Admiral said interim pre-tax profits rose 4% to £218.2m as it booked a £33m charge as a result of changes in the rate used to calculate personal injury claims payouts. The company on Wednesday said its UK Insurance division recorded “modest” growth in turnover to £1.34bn, up from £1.32 bn with customer numbers reaching 5.32m compared with 5.07m a year ago.
AstraZeneca announced positive results from the phase 3 ‘PAOLA-1’ trial in women with advanced ovarian cancer, alongside its partner MSD, on Wednesday. The FTSE 100 pharmaceuticals giant said the trial compared ‘Lynparza’ (olaparib) added to standard-of-care bevacizumab to bevacizumab alone in women with or without BRCA gene mutations, and met its primary endpoint in the intent-to-treat population, with a statistically-significant and clinically-meaningful improvement in progression-free survival. At the same time, AstraZeneca announced that the US Food and Drug Administration had granted ‘Breakthrough Therapy Designation’ (BTD) for ‘Calquence’ (acalabrutinib), as a monotherapy treatment for adult patients with chronic lymphocytic leukaemia.
FirstGroup’s partnership with Italian state railway operator Trenitalia was told by the Department for Transport that it intended to it award the new West Coast Partnership rail franchise to the 70-30 joint venture First Trenitalia West Coast Rail. The FTSE 250 passenger transport operator said the new partnership would operate from 8 December, and comprised two distinct phases - in the first phase to March 2026, it would operate existing InterCity West Coast services while providing a range of design, development and mobilisation services as ‘shadow operator’ to the High Speed 2 programme. First Trenitalia would then operate HS2 and the reshaped InterCity West Coast rail services as an integrated operation in the second phase, from March 2026 until March 2031.
Newspaper round-up
Campaigners and unions have warned that ever higher train fares risk driving passengers off the railway, as a fresh increase of about 2.9% is expected to be confirmed on Wednesday and after a decade when fares have risen at double the rate of wages. The fare rise, to take effect in January but dictated by the July inflation figure that will be published by the Office for National Statistics on Wednesday, will add more than £100 to many annual season tickets. – Guardian
US media companies CBS and Viacom announced a merger on Tuesday in a bid to strengthen their position as they take on Netflix’s streaming insurgency and face up to the loss of “cord-cutter” viewers. The deal, which will reunify the pair after more than a decade apart and create a new company worth about $30bn, combines Viacom’s MTV, Nickelodeon, Comedy Central and the Paramount film and TV studio with CBS’s broadcast network and its Showtime subscription channel. – Guardian
The Government has asked industry groups to come up with “creative and practical” ways to help businesses prepare for a no-deal Brexit. It has also invited them to bid for funding to help tell companies how to brace for the impact of the UK crashing out of the European Union without a trade agreement. – Telegraph
Boris Johnson risks betraying the EU referendum result by allowing “unelected people” intent on wrecking any chance of a deal to “pull the strings” of his government, Philip Hammond is warning. In his first intervention since resigning as chancellor, Mr Hammond accuses Dominic Cummings, Mr Johnson’s most senior aide, of attempting to force through a no-deal Brexit by making demands that Brussels “cannot, and will not, accede to”. – The Times
The American short-seller targeting Burford Capital has stepped up its campaign by issuing a second critical report on the litigation finance company and calling on the City regulator to launch a formal investigation. Muddy Waters, the San Francisco-based bear raider, said: “We believe that management’s conduct has possibly given rise to sanctions claims by the FCA [Financial Conduct Authority]. – The Times
US close
Stocks on Wall Street soared on Tuesday, with major indices almost completely erasing the serious losses seen during the previous session after Washington removed several items from its list of new Chinese tariffs.
At the close, the Dow Jones Industrial Average was up 1.44% at 26,279.91, while the S&P 500 was ahead 1.48% at 2,926.32 and the Nasdaq Composite traded 1.95% firmer at 8,016.36.
The Dow closed 372.54.63 points higher on Tuesday, bouncing back from sharp losses in the prior session as a result of mounting fears that ongoing tensions between the US and China could lead to a global recession.
Although futures had stocks opening lower again, the main market gauges turned green after the US Trade Representative's office said on Tuesday that certain items were being removed from its new Chinese tariff list because of "health, safety, national security and other factors" while levies on some other goods would not go ahead.
The products in the group that will have tariffs delayed include "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”
Tariffs on the remaining goods will be pushed out until 15 December as part of an effort to avoid any potential impact on holiday shopping.