New home sales drive Berkeley profits higher, AstraZeneca lung cancer treatment approved in China

London open

The FTSE 100 is expected to open five points lower on Wednesday, having closed up 0.39% on Tuesday at 7,090.01.

Stocks to watch

Housebuilder Berkeley on Wednesday reported a rise in annual profits driven by sales of new homes in London and the South East. Pre-tax profit for the year to April 30 rose 2.9% to £518.1m as revenue rose 14.7% to £2.2bn. The company maintained long-term guidance of a 15% cumulative pre-tax return on equity until April 2025 and said it expected profits in the next two years to be similar to 2021.

AstraZeneca announced on Wednesday that ‘Orpathys’, or savolitinib, has been granted conditional approval in China to treat patients with non-small cell lung cancer (NSCLC), with MET exon 14 skipping alterations who have progressed following prior systemic therapy or were unable to receive chemotherapy. The FTSE 100 pharmaceuticals giant said the approval was on the back of priority review designation by China’s Center for Drug Evaluation, and marked the first global regulatory approval for the “oral, potent, and highly-selective” MET tyrosine kinase inhibitor. AstraZeneca entered a licensing deal with Hutchmed in 2011, to jointly develop and commercialise Orpathys.

Newspaper round-up

Labour has urged the government to step in to ensure a potential private equity takeover of supermarket chain Morrisons does not affect Britain’s food security, damage farming, or lead to job losses. The country’s fourth-largest grocer, which employs 110,000 people, said on Saturday it had rejected an unsolicited £5.5bn offer from US buyout group Clayton, Dubilier and Rice (CD&R). - Guardian

Channel 4’s four decades as a publicly owned broadcaster could be about to come to an end, with ministers pushing ahead with controversial plans to sell the channel as part of a shake-up that could transform the landscape of British television. The culture secretary, Oliver Dowden, confirmed that he would hold a swift consultation on proposed privatisation, in a move that would mark the end of an era in British broadcasting and would radically alter how one of the UK’s leading public service television networks operates. - Guardian

The UK government has told HMRC to show leniency in collecting unpaid taxes from companies ravaged by coronavirus-induced debt, in order to avoid a wave of insolvencies this summer. Business secretary Kwasi Kwarteng wrote to business groups this week promising that the taxman would take “a cautious approach to enforcement of debt owed to the government that will have accrued” amid the pandemic. - Telegraph

Nordgold has pulled a planned London listing after gold prices fell on expectations of rising US interest rates. The Russian gold miner had been targeting a valuation of more than $5 billion and a place in the FTSE 100 index. It said yesterday it had decided to “postpone” its proposed initial public offering (IPO) following the drop in prices for the precious metal. - The Times

A London-based hedge fund wrongfooted by this year’s meme stock frenzy is shutting down. White Square Capital has told investors that it is closing its main fund and returning capital to clients, according to the Financial Times, citing sources familiar with the fund. - The Times

US close

Wall Street stocks closed higher on Tuesday after the Dow Jones Industrial Average turned in its best performance since March a day earlier.

At the close, the Dow Jones Industrial Average was up 0.20% at 33,945.58, while the S&P 500 was 0.51% firmer at 4,246.44 and the Nasdaq Composite saw out session 0.79% stronger at 14,253.27.

The Dow closed 68.61 points higher on Tuesday, adding to the considerable gains recorded by the index in the previous session.

Tuesday's main focus was testimony from Federal Reserve chairman Jerome Powell before the House of Representatives, where he discussed the central bank's response to the Covid-19 pandemic.

Powell's remarks supported the expectation that the Federal Reserve will shortly look to discuss removing a number of the unprecedented stimulus measures it put into place as a result of the pandemic.