• FTSE 100 down 112 points
  • Brussels Court rules in favour of AstraZeneca 
  • US stocks sink

3.25pm: AstraZeneca wins EU legal challenge over COVID-19 vaccine deliveries

The FTSE 100 stayed put ahead of close, plummeting 110 points to 7,042.

AstraZeneca PLC (LON:AZN) said a Brussels Court has ruled in its favour in a legal challenge brought up by the European Commission regarding COVID-19 vaccine deliveries.

The FTSE 100 pharma giant has been criticised by the bloc after cutting supplies below the levels indicated by initial contracts.

But the judge ordered delivery of 80.2 million doses by 27 September, as the company has supplied more than 70mln to date.

The deal was to dispatch 300mln doses to the EU by the end of September 2021.

“All other measures sought by the European Commission have been dismissed, and in particular the Court found that the European Commission has no exclusivity or right of priority over all other contracting parties,” the company said in a release.

“The judgement also acknowledged that the difficulties experienced by AstraZeneca in this unprecedented situation had a substantial impact on the delay. AstraZeneca now looks forward to renewed collaboration with the European Commission to help combat the pandemic in Europe.”

Shares were flat at 8,383p on Friday afternoon.

2.50pm: Proactive North America headlines:

Naturally Splendid Enterprises Ltd (CVE:NSP) (OTCPINK:NSPDF) (FRA:50N) buys ‘state-of-the-art’ packaging line and issues shares to cancel debt

Esports Entertainment Group Inc (NASDAQ:GMBL) launches InVIE esports tournament series in South America

Ready Set Gold Corp (CSE:RDY) (OTCPINK:RDYFF) (FRA:0MZ) says will advance Northshore project with pending private placement of convertible debentures

Versus Systems Inc (NASDAQ:VS) (FRA:BMVB) powers in-stadium engagement for Los Angeles Football Club as live events roar back

Plurilock Security Inc (CVE:PLUR) (OTCQB:PLCKF) beats competition to win new order from California state taxation agency

Perma-Fix Environmental Services Inc (NASDAQ:PESI) (FRA:PFX1) announces new Therma-Fix Gen3 vacuum thermal desorption system to treat problematic waste streams

North Arrow Minerals Inc (CVE:NAR) (OTCMKTS:NHAWF) (FRA:VTJ1) starts till sampling program to identify kimberlite source at newly-staked CSI diamond project in Nunavut

2.45pm: Wall Street opens in the red

The main indices on Wall Street tumbled at the opening bell on Friday as investors were spooked by talk of interest rate hikes and worries about inflation.

In the early minutes of trading, the Dow Jones Industrial Average was down 1.11% at 33,448 while the S&P 500 dropped 0.86% to 4,185 and the Nasdaq fell 0.61% to 14,075.

While the market was broadly lower, an early winner was software firm Adobe Inc (NASDAQ:ADBE), which jumped 1.8% to US$561.34 shortly after the opening bell following strong quarterly numbers reported after the close on Thursday.

Back in London, the FTSE 100 was continuing to sink lower, falling 112 points to 7,041 at around 2.45pm.

1.30pm: Royal Dutch Shell, BP dragged by lower oil prices

The FTSE 100 was even lower in the early afternoon and plummeted 107 points to 7,046.

Looking at its constituents, Royal Dutch Shell Plc (LON:RDSA)(LON:RDSB) was down 4% to 1,363.6p and 3% to 1,414.5p for its class B and A shares respectively, while BP PLC (LON:BP.) shed 3% to 314.85p.

Oil prices are edging lower on Friday for a second straight session due to a strong US dollar following the Fed’s hawkish shift.

“The bullish trend in oil remains intact, thanks to optimism surrounding the demand outlook. The Dollar may well be strengthening but the fundamental picture for oil hasn’t changed,” said Sophie Griffiths, analyst at OANDA.  

“The supply/ demand equation continues to favour the demand side meaning that any sell off will likely be short lived. Taking a longer view on the oil market, rate hikes are a headwind, but a lot can change between now and 2023!”

“Meanwhile, the near-term demand outlook continues to improve with international travel restarting. The EU has added the US to its list of countries allowing non-essential travel.”

12.15pm: Wall Street to see mixed open

The FTSE 100 plunged deeper in the red at midday, down 79 points to 7,074.

Wall Street indices are also set for a subdued open, with the Dow Jones called 45 points lower at 33,649 and the S&P 500 4 points lower at 4,207.

The Nasdaq may offer some respite as futures are pointing at a green open, up 19 points to 14,176.

Declines in the former two indices highlight the ongoing concerns that rising inflation could soon curtail the expansive monetary policy mix around the world.

“Despite promises that central banks will remain accommodative, we are evidently moving towards a phase which will become increasingly dominated by attempting to quantify just how long we have left until the pendulum starts to swing back towards monetary tightening,” analysts at IG said.

“With Norway’s central bank laying out plans to start raising rates in September, we are evidently seeing growing confidence that the worst is behind us and thus normalisation will be required to avoid overheating.”

Thursday came with another rally for the US dollar overnight, with the index rising through its 200-DMA at 91.50 on its way to a close at 91.90, a 0.55% gain for the day.

“A less-dovish FOMC, foreign inflows into the US bond market, and a speculative market that was well short of US DOllars into the FOMC, should see the US Dollar rally continue into next week,” analysts at OANDA said.

11.15am: PageGroup, Hays benefit from strong white-collar momentum, says Jefferies 

The Footsie continued its descent in late morning, plunging 66 points to 7,087.

PageGroup PLC (LON:PAGE) and Hays PLC (LON:HAS) got their earnings per share (EPS) upgraded by Jefferies over “increasing evidence that strong white-collar momentum has persisted”.

The figures for both recruiters were moved to the top of the range ahead of their second-quarter results in early July.

Analysts at the investment bank were 19% above the full-year consensus for Page and 8% for Hays, with ‘buy’ ratings for both companies, even though they are 10%-15% below 2019 peak revenue.

Hays dipped 1% to 164.90p while PageGroup remained flat at 585p.

Jefferies said JOLTS data is too lagged to provide insight into current labour market trends, so it used weekly job advertisements from Indeed.com, as these have over 90% correlation with the temp industry volume growth.

Job search activity has yet to revive in the 25 US States, it said, as generous unemployment insurance has created a disincentive to participate in the labour market and some are hesitant to return to work due to COVID-19 risk.

“These are likely to be temporary headwinds because 25 states have brought forward cessation of programmes from September to June/July,” analysts noted.

“In addition, perhaps work/life balance and the utility of leisure (particularly vacation, visiting family/friends, etc.) has been reassessed post-pandemic.”

Job ads growth in the UK was deemed “strong but choppy”, though it remained “subdued” in France with Germany and Netherlands improving.

9.50am: Drama ahead for boohoo AGM over sustainability concerns

The FTSE 100 extended its losses in mid-morning, tumbling 24 points to 7,129.

There’s drama brewing at boohoo Group PLC (LON:BOO) as the fast-fashion retailer is holding its AGM today.

Investors are still concerned about progress in the ESG agenda as top executives may not be doing enough to draw a line under last summer’s scandal.

The AIM-listed giant, worth £4bn, appointed former high court judge Sir Brian Leveson who found that the conditions unveiled showed a clear lack of oversight, dismal monitoring and poor governance at the company.

Glass Lewis, which advises institutional investors, has pushed for a vote against the reappointment of executive director and co-founder Carol Kane, despite the recent improvements. The advisers have also raised concerns about company chair and co-founder Mahmud Kamani even though he won’t face re-election this year.

“Given the proportion of shares held by Carol Kane and the Kamani family, Ms Kane is likely to still be re-appointed. However a revolt would demonstrate again the growing demand for responsible investing,” said Susannah Streeter at Hargreaves Lansdown.

“There is growing awareness among investors that investing with ethical concerns in mind is good risk management. Businesses are increasingly facing pressure from to force them to think longer term, and be mindful not just of environmental issues but also the way they treat their employees and the way they make money.”

8.40am: FTSE 100 makes a subdued start

The FTSE 100 made a subdued start to an early session dominated by retail.

Official figures showed high street and online sales fell 1.4% in May as consumers took advantage of lockdown restrictions to dine out rather than shop.

Within that figure, food volumes were down by 5.7%. That chimed with the performance of Tesco (LON:TSCO) in the first quarter, which posted a sharp slowdown in underlying growth.

That said, a like-for-like sales increase of 0.8% was far better than the market had been expecting.

Analysts thought the grocer’s top-line to shrink 1% in the three months, which put it up against some testing year-earlier comparisons. The shares opened 1.4% lower.

“It is no mean feat to have nudged sales higher than at the height of the pandemic last year, and significantly ahead of two years ago,” said Richard Hunter, head of markets at Interactive Investor, of Tesco’s Q1 performance.

“This could suggest that Tesco is holding on to some of the market share it gained over the last year, which bodes well for prospects.

“The latest lockdown during the period was also a factor, with meals at home remaining in force, such that UK sales peaked in March at 14.6% ahead of two years ago.”

Sticking with the retail sector – but focusing on the automotive sector – Inchcape (LON:INCH) led the FTSE 250 with a 6% gain after the car dealer said its profits would likely exceed forecasts.

6.5 am: Footsie set open in the red 

The FTSE 100 is expected to open lower on Friday as UK retail sales may reflect slowing supermarket sales.

The figures are ending a week of fairly strong UK economic data, ahead of next week’s Bank of England monetary policy decision. 

“According to the British Retail Consortium May sales rose at their best rate since the pandemic struck the UK. Total sales increased 10% in May compared to 2019, and by more than the same number in April on a two-year basis, with clothing retailers the biggest beneficiaries of a return to the High Street,” said Michael Hewson at CMC Markets UK.

“We could also have seen some forward bookings for hotel accommodation in the leadup to the May reopening as consumers book time away over the half term break, while the reopening of cinemas could also have acted as a boost.”

“If the recent May services PMIs are any guide, we could well still see a fairly robust month for consumer spending in May, though official estimates appear to be more conservative with a rise of 1.5% expected.”

Looking at global markets, Thursday’s US finish saw the Dow finish lower again for the fourth day in a row, and on course for a second successive weekly decline, while the Nasdaq finished higher, with the prospect that we could see a fifth successive weekly rise.

In Asia the Bank of Japan left monetary policy unchanged while extending its special lending program for companies affected by the pandemic to March 2022. 

On the corporate schedule we have a trading update from Tesco PLC (LON:TSCO) and Inspecs Group PLC’s (LON:SPEC) finals scheduled for Friday.

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Friday as the Bank of Japan kept monetary policy steady and announced an extension of its pandemic-relief program.

The Shanghai Composite in China dipped 0.56% and Hong Kong’s Hang Seng index rose 0.58%

In Japan, the Nikkei 225 slipped 0.03% while South Korea’s Kospi lifted 0.14%.

Shares in Australia gained, with the S&P/ASX 200 trading 0.47% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Emperor Energy Ltd (ASX:EMP) has raised $1 million in a capital raise that was heavily oversubscribed within two hours.

SUDA Pharmaceuticals Ltd (ASX:SUD) (FRA:E4N) has signed a global, exclusive licence agreement with Imperial College London for a novel invariant Natural Killer T (iNKT) cell therapy platform.

Zelira Therapeutics Ltd (ASX:ZLD) (OTCMKTS:ZLDAF) (FRA:G1G) is buoyed that Curtin University researchers have developed a new technology that improves delivery of cannabidiol (CBD) based drugs into the brains of mice by up to 40-times.

Arafura Resources Limited (ASX:ARU) (OTCMKTS:ARAFF) (FRA:REB) has welcomed support from the Northern Australia Infrastructure Facility (NAIF) in relation to a potential senior debt facility as part of the funding package for its Nolans Rare Earth Project.

Danakali Ltd (ASX:DNK) (LSE:DNK) (OTCMRKTS:DNKLY) says test-work conducted at its low-cost Colluli Potash Project in East Africa has confirmed production rates and outlines a path to lower operating and capital costs.

Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) has completed the sale of the Wadikkee and Carappee Hill tenements on South Australia’s Eyre Peninsula to NextGen Materials Pty Ltd.

Paradigm Biopharmaceuticals Ltd (ASX:PAR) (OTCMKTS:PBIGF) has received a key regulatory approval from Brazilian National Health Surveillance Agency ANVISA for its Phase 2 clinical trial evaluating the safety and tolerability of injectable (SC) pentosan polysulfate sodium (iPPS) versus placebo in subjects with Mucopolysaccharidosis type VI (MPS VI).

Kin Mining NL (ASX:KIN) is turning its focus to regional exploration targets after a major fourth phase drilling campaign at its wholly-owned Cardinia Gold Project.

Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) has returned thick intersections in reverse circulation (RC) drilling at Big Sky prospect along a new gold corridor southwest of Lena deposit at the Cue Project in Western Australia.

Shree Minerals Ltd (ASX:SHH) is focused on exploration and development of its range of projects across Tasmania, the Northern Territory, Western Australia and New South Wales.

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