Market Report: Allergy given a hay fever shot in the arm

  • @greentoby

Punters in Allergy Therapeutics were breathing a little bit easier yesterday. The Aim-listed drugs company was enjoying a revival after regulators in the States finally decided to rescue its grass pollen allergy vaccine from limbo.

While Allergy's Pollinex Quattro product – a jab that hay fever sufferers only need to inject four times each year – is already on sale in a number of European countries, the US Food and Drug Administration has had a clinical hold on the vaccine since 2007.

Now, the group revealed, it has been given the go-ahead for the next round of studies on the drug.

With bosses saying the subsequent step is to team up with someone to help commercialise Pollinex Quattro in the States, Gary Waanders, an analyst at house broker Nomura Code, said the news meant the "outlook for the company in finding a partner for the... program in the USA has improved immeasurably".

Certainly many in the Square Mile were sold, dosing up on shares in Allergy as it jumped up 3.12p to 11.75p, although the company did signal over a year ago the clinical hold was set to be lifted. Its share price doesn't look quite so healthy over the long-term, however – the stock has still been cut in half since April 2011.

Allergy was by no means the only company shooting up on news from across the Atlantic. The closely watched non-farm payroll figures boosted stocks in Wall Street and Europe by revealing 163,000 jobs were added in the US last month, ahead of expectations.

This prompted the FTSE 100 – which had been down in the dumps on Thursday thanks to disappointing comments from European Central Bank boss Mario Draghi – to shoot up 124.98 points to 5,787.28, its highest for over three months.

The data proved helpful for the miners, as Kazakhmys and Vedanta Resources climbed 44.5p to 723.5p and 53p to 954.5p. However, the biggest blue-chip riser was Aviva. The insurer charged up 21p to 306.2p in the wake of expectation-beating results from two of its rivals, France's Axa and US group AIG.

Also giving Aviva a helping hand was Investec's Kevin Ryan telling investors to keep buying the stock ahead of its upcoming first-half results, with the analyst saying he expects bosses to maintain its interim dividend.

Royal Bank of Scotland was another strong riser. After its interim results contained no nasty surprises, the state-owned bank advanced 11.5p to 216p while rival Barclays was also going well, climbing 9.05p to 171.35p. Just two Footsie stocks ended up falling, with IAG being knocked back 8.3p to 151p as the British Airways owner warned it was now expecting to suffer a full-year operating loss.

Could City Link actually be about to turn a profit? The loss-making courier business has for a long time been a major headache for Rentokil Initial, but yesterday the multi-tasking group announced it now expected the unit to return to profitability in the final three quarters of the year.

With Rentokil also revealing its pre-tax profits jumped 7 per cent over the fist six months, the rat-catcher was pushed up 4.35p to 76p in response as Panmure Gordon's analysts removed their "sell" recommendation. However, Seymour Pierce's Caroline de La Soujeole warned she was "not convinced" by the claims regarding City Link while Investec's Robert Morton said it "may be too early to bank on it".

Although John Lewis' latest weekly numbers showed that trading had been hurt by the start of the Olympics, the department store also announced online sales at Waitrose had jumped 34 per cent year-on-year.

This, Shore Capital said, was "materially ahead of that recorded by Ocado" as scribblers at the broker added that they saw "scope for sustained switching" from the online grocer to Waitrose. They also went on to reiterate their "sell" advice, although nonetheless Ocado ended up 3.3p better off at 77.6p.

Stockbroker XCAP Securities was on the up. The tiddler was fired up 23 per cent to 0.4p (although that's only a rise of 0.08p) on Aim after announcing it had hired Sir Peter Middleton – the former chairman of, among others, Barclays and National Lottery operator Camelot – as its non-executive chairman.