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Talks resume on Sizewell project; sterling at month high
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4.30pm: London Covid move hits market
Hopes of a Brexit deal were pushed to one side after London was plunged into the highest coronavirus restrictions from Wednesday.
The FTSE 100 had spent all day in positive territory but the announcement saw it finish in the red, closing the session 14.92 points lower at at 6,531.83.
Drugs giant AstraZeneca fell 5.74% to 7,692p, despite unveiling a deal to buy immunology and rare disease specialist Alexion Pharmaceuticals.
1.30pm: Menzies deal
Menzies Distribution has acquired Bibby Distribution, a national logistics and supply chain services business.
12.40pm: Bifab administrator
Deloitte has been appointed as BiFab administrator as Economy Secretary Fiona Hyslop renewed a pledge to find new work for the Fife company.
8.30am: Nuclear talks with EDF
The Department for Business, Innovation and Skills is resuming talks with French state-owned EDF on its plan to build a £20bn nuclear reactor at Sizewell C in Suffolk. It could take a direct financial stake in its construction.
In a statement, the DBIS said it would consider a greater role in the project provided there was “clear value for money for consumers and taxpayers”.
Negotiations on the reactor were suspended over cost concerns and the involvement of China General Nuclear Power (CGN) which holds a 20% stake in the project.
CGN may back out of the project, according to recent reports, which would leave a financing gap for EDF if the UK government is unwilling to help pay for the construction costs.
The Sizewell C site could generate 3.2 gigawatts of electricity, enough to provide 7% of UK energy needs.
8.15am: London rebounds
The FTSE 100 opened lower but rebounded to trade 25 points higher at 6,571.72.
“Sterling has rallied 1.2% to $1.3390 versus the US dollar as markets showed some relief that EU trade talks haven’t collapsed,’ says Russ Mould, investment director at AJ Bell.
“The fact that negotiations have been extended to the end of the year gave investors hope that a deal could still be reached. The FTSE 250 jumped 1.2% to 19,852 while the FTSE 100 advanced by 0.3% to 6,564 with housebuilders, banks and retailers all rallying across both indices.
“This is encouraging, but one must also remember that only a few days ago the market was starting to lose hope of a deal. Stocks jumped on Monday because there is more time for negotiations, not because feedback from either side has been particularly positive. Therefore, today’s stock rally could easily prove to be a false dawn.”
7am: Sterling rallies
The pound has started the week higher after UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen agreed to continue Brexit talks in hopes of achieving a last-minute deal.
The extension has given a lift to sterling which recorded its largest one-day leap against the US dollar since 1 December. It was trading this morning just above $1.33 – 0.72% higher – after its slide last week. Against the euro, the currency was slightly below €1.10.
The FTSE 100 looked set to open six points lower at 6,540.75, according to the spread betting firms.
Aside from Brexit, traders are likely to focus on the start of Covid vaccine deliveries in the US. The Pfizer-BioNTech version is due to begin shipping today.
The Glasgow packaging group has appointed James Macdonald as company secretary effective from 1 January , succeeding Ivor Gray who, as announced on 19 November, will take up the position of group finance director.
Aviva sells Asia unit
Aviva is selling its wholly- owned life insurance business in Vietnam to Manulife Financial Asia for an all cash consideration.
The transaction is expected to increase Aviva’s IFRS Net Asset Value and Solvency II surplus by c.£0.1 billion.