London pre-open: Stocks seen lower but vaccine news could provide a lift
London stocks were set to fall at the open on Wednesday following strong gains in the previous session, but sentiment was likely to get a boost from news the UK has approved Pfizer’s Covid-19 vaccine for rollout next week.
The FTSE 100 was called to open 20 points lower at 6,364.
CMC Markets analyst David Madden said: "Stock markets in Europe and the US rallied yesterday on the back of optimism surrounding vaccine hopes. Pfizer-BioNTech and Moderna have applied for conditional marketing approval from the European Medicines Agency. The progress being made on the pharma front has been the main driving force in the markets lately. Indices in Europe posted solid gains while the S&P 500 closed at a record level.
"The US stimulus package talks are back in focus. Yesterday a group of bipartisan politicians put forward a $908bn relief package. One Senator described it as an ‘interim’ proposal. In advance of the Presidential election, Nancy Pelosi of the Democrats and Mitch McConnell of the Republicans were very far apart with regards to working out a package. Pelosi was pushing for a $2.2 trillion scheme, while McConnell was driving for a $500 billion programme. Yesterday, McConnell talked about a $1.4 trillion package so things seem to be heading in the right direction.
"In Asia, equity markets haven’t moved much and European indices are tipped to open a touch lower."
Despite the negative opening call, markets could well be lifted by news that the UK has become the first country in the world to approve the Pfizer/BioNTech Covid vaccine.
In corporate news, Tesco said it would repay £585m of Covid-19 business rates relief to the UK after Britain's supermarkets came under pressure to return the money. The supermarket chain said it had used all the money to respond to the pandemic but that its business had proved resilient. Tesco has paid dividends to shareholders during the crisis.
Tesco said it would work with the UK's governments to find the best way of returning the money. It said excluding the repayment its guidance for annual retail operating profit was unchanged.
GardaWorld lifted its offer for G4S to 235p a share, valuing the company at £3.68bn.
The new, and final, offer is a premium on Tuesday’s closing price of 229p. GardaWorld, which first launched its bid in September, reduced its acceptance level to 50% plus one share and said it reached an agreement with the G4S UK pension trustees on a £770m support package comprising cash and other measures.