By Samuel Indyk
Investing.com – The FTSE 100 trades relatively flat at the midpoint of the trading day despite services sector activity falling to its lowest level since May. The IHS Markit services PMI survey showed that businesses were struggling in the latest lockdown, particularly those in the hospitality and travel & leisure sector. However, businesses are optimistic with growth expectations at their highest level since 2014 on prospects of a strong reopening as the vaccine effort continues.
Vodafone Group PLC (LON:VOD) shares rose to the top of the blue-chip index after a positive trading update where they had benefited from work from home policies in Germany. Separately, they announced that the spinoff of their towers division, Vantage Towers, was on track for early 2021. Reuters had earlier reported that the company is expected to list the division in Frankfurt in March this year.
Vaccine Makers
AstraZeneca PLC (LON:AZN) was again in focus after early studies showed that a single dose of the vaccine was 76% effective for up to 12 weeks, justifying the UK’s decision to vaccinate as many people as possible in as quick a time frame as feasible. The data - published by Oxford University - is not yet peer-reviewed but will provide the UK government with assurance that they have made the right decision. On the other hand, France has followed Germany’s lead and recommended that the Oxford/AstraZeneca jab not be given to those over 65, given a lack of data in the early trials. This comes despite the European Medicines Agency authorising the use of the jab for over 65s.
Another UK-based pharmaceutical company, GlaxoSmithKline PLC (LON:GSK), announced a deal with Germany’s CureVac NV (NASDAQ:CVAC) to work together to develop vaccines against the new variants of the virus. The deal, worth EUR 150mln, will also see GlaxoSmithKline assist in manufacturing CureVac’s current vaccine candidate for the original strain.
Sterling
The pound fell against the US dollar and was broadly flat against the Euro as markets look ahead to tomorrow’s Bank of England interest rate decision. Focus will be on whether the central bank sees negative rates as part of their toolkit should economic prospects weaken further. Trading ranges have been relatively narrow with GBP/USD between 1.3624-1.3665 and EUR/GBP between 0.8801-0.8823.