LONDON MARKETS: FTSE 100 Closes Lower As AstraZeneca Plunges; Diageo Shares Surge
July 27 2017 - 12:50PM
Dow Jones News
By Carla Mozee, MarketWatch
Anglo American reinstating dividend
U.K. stocks slipped Thursday, marking their first loss in three
sessions as drug heavyweight AstraZeneca PLC tumbled following a
disappointing cancer-drug trial, while the pound pushed another leg
higher against the dollar.
The FTSE 100 index ended lower by 0.1% at 7,443.01 after a
choppy session that left utility and financial shares among
decliners, while consumer goods and basic material shares
higher.
"It's the same old story for stock markets in Europe, where by
the FTSE 100 is rangebound and the Continental benchmarks like the
DAX and CAC 40 are still in the downward trends they have been in
since June and May, respectively," wrote CMC Markets analyst David
Madden.
"Indices on this side of the pond don't have the enthusiasm as
the U.S. ones do, and it is a bit concerning when European markets
can't be spurred on by the record highs in America," he said.
Read:U.S. stocks set for more records as Facebook rallies
(http://www.marketwatch.com/story/tech-stocks-poised-to-drive-another-record-day-on-wall-street-led-by-facebook-2017-07-27)
Investors had a raft of corporate earnings reports and updates
to sort through Thursday. Standing out was AstraZeneca PLC (AZN.LN)
(AZN.LN)as shares plunged 15.4% after the company said a Phase 3
clinical trial
(http://www.marketwatch.com/story/astrazenecas-late-stage-trial-failure-sends-its-shares-down-16-and-bristol-myers-merck-stocks-seesawing-2017-07-27)
of its Mystic treatment for lung cancer failed to meet its primary
endpoint
(http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27).
Separately, AstraZeneca swung to second-quarter profit on lower
revenue
(http://www.marketwatch.com/story/astrazeneca-swings-to-profit-as-revenue-falls-2017-07-27).
But Diageo PLC (DEO)(DEO) topped the FTSE 100 as its shares
leapt 6%. The world's largest liquor maker, whose brands include
Johnnie Walker whisky, raised its target for profit margin growth
(http://www.marketwatch.com/story/diageo-full-year-earnings-lifted-by-currency-boost-2017-07-27)
as it benefited from currency tailwinds and logged more sales.
Fed and sterling: In the mix of earnings was the pound, which
leapt above $1.31 late Wednesday. That move came after the U.S.
Federal Reserve struck what was seen as a somewhat cautious note on
U.S. inflation
(http://www.marketwatch.com/story/dollar-in-holding-pattern-as-investors-wait-for-feds-signals-on-policy-2017-07-26),
a bearish tilt for the greenback.
A stronger pound can eat into revenue and earnings made overseas
by multinational companies that populate much of the FTSE 100. The
pound on Thursday logged an intraday high of $1.3159 before moving
back to $1.3081. Sterling late Wednesday settled at $1.3122 late
Wednesday in New York.
Aiding the pound intraday were figures from the Confederation of
British Industry showing growth in retail sales in the year to
July.
Stock movers: Lloyds Banking Group PLC (LLOY.LN)(LLOY.LN) fell
2.3% as the lender said posted an 18% decline in half-year net
profit to GBP1.3 billion
(http://www.marketwatch.com/story/lloyds-profit-narrows-on-1-bln-compensation-bill-2017-07-27-3485306),
hurt by provisions aimed at compensating customers.
Mining heavyweight Anglo American PLC (AAL.LN) bounced up 3.2%
as the company said it's reinstating its dividend
(http://www.marketwatch.com/story/anglo-american-reinstates-dividend-as-profit-gains-2017-07-27)for
the first half. It also swung to a first-half profit of $1.4
billion.
Smith & Nephew PLC (SN.LN) picked up 3.3% as the maker of
knee and hip implants and other medical technology said it's on
track to reach its 2017 growth target
(http://www.marketwatch.com/story/smith-nephew-profit-rises-on-track-for-targets-2017-07-27)
as it reported a 17% rise in half-year pretax profit, to $383
million.
Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) finished higher by
0.7%. The oil major said second-quarter net profit rose to $1.9
billion
(http://www.marketwatch.com/story/shells-profit-rises-to-19-billion-2017-07-27)
and that it generated enough cash to cover dividend payments and
lower debt. Shell Chief Executive Ben Van Beurden said the company
is continuing to adapt to lower oil prices.
Read:Shell sees future of 'lower forever' oil prices
(http://www.marketwatch.com/story/shell-sees-future-of-lower-forever-oil-prices-2017-07-27)
(END) Dow Jones Newswires
July 27, 2017 12:35 ET (16:35 GMT)
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