FTSE 100 set to hold on to gains as investors await key GlaxoSmithKline update and bitcoin jumps

he FTSE 100 Index was set to hold on to its current highs amid strong oil prices and increased hopes of an end to Covid lockdown restrictions on July 19.

Reports today say that ministers have been encouraged by the very low numbers of coronovirus deaths recently, coupled with the slowdown in infections. This is giving them the confidence to lift all social distancing, work from home and even mask-wearing rules.

The news should come as a boost to hospitality share prices as even nightclubs will be allowed to reopen if all goes to plan.

Where cases were doubling every week, that has now lengthened to 15 days.

The FTSE, which gained yesterday despite choppy markets, was set to hold steady at around 7100 at the opening of trading, up a marginal 0.5 points.

Bitcoin bounced back from its falls yesterday below $33,000. Currently, the crypto currency stands at $33,765, up 2.6% in the past 24 hours. The mysterious asset has pretty much halved in value since its highs in April. Experts trying to explain it all have blamed the recent fall on a Chinese clampdown on Bitcoin mining.

All eyes will be on GlaxoSmithKline’s shares today as chief executive Emma Walmsley leads her team’s presentations on the group’s prospects after her planned restructuring. Walmsley is splitting off the group’s huge consumer arm so the company will be a focused drug and vaccines company – “New GSK”.

Amid a falling share price, activist investor Elliott has built up a stake and is said to be planning to overthrow Walmsley’s plan to lead the remaining business.

Key questions bothering GSK shareholders:

Will the consumer arm be floated on the stock market in a move to raise new money for the drugs arm? Long-suffering existing investors fear this would dilute their existing stake in the business.

What are the prospects of GSK’s existing pipeline of new medicines? Analysts say it is weak and GSK faces a series of expiries on its big medicines.

Will GSK buy in new potential medicines in the hope of finding the next blockbuster? Investors say it needs two megablockbusters to make up for the medicines going out of patent. Buying a smaller drug developer could be the answer but is a risky way to spend shareholders’ money.

Can Walmsley persuade them that she is the woman to run the business, given her lack of science experience? A growing clamour thinks not, although her supporters say she has assembled an impressive array of scientists in key positions at the company.

How deeply will she cut the dividend? Investors know Walmsley has to scale back the company’s dependable £4 billion-a-year divi to invest in the group’s future, but what will the new policy on payouts be? Analysts’ consensus is of a cut from 80p to 45p a share but want assurances the money won’t be wasted.

Shareholders are also awaiting the next move from Morrisons’ bidder Clayton, Dubilier & Rice after engineer Senior kicked out a private equity bid yesterday. The upshot of Senior’s decision was for the shares to plummet – food for thought for Morrisons’ board.