By Carla Mozee, MarketWatch
LONDON (Marketwatch) -- U.K. equities advanced Tuesday, with
AstraZeneca PLC gaining on speculation that the British drug maker
will receive a takeover bid, while GlaxoSmithKline PLC shares rose
as the pharmaceutical heavyweight made a couple of its own
deals.
U.K.'s FTSE 100 index leapt 1.1% to 6,699.85, following a
four-day break in trading in observance of the Easter holiday. Last
week, the index finished the holiday-shortened week higher by
1.1%.
The FTSE on Tuesday broke above "several resistance levels"
including the 6,680 mark, paving the way for the benchmark index to
retest an April peak of around 6,705, said Fawad Razaqzada,
technical analyst at Forex.com, in a note.
The strongest price performer in Tuesday's session was
AstraZeneca (AZN), with a 6.4% surge coming after a Sunday Times
report that Pfizer Inc. -- the largest drug maker in the U.S. --
had approached AstraZeneca about a possible GBP60 billion ($100.78
billion) merger. Separately, the Daily Telegraph reported that
AstraZeneca has hired Goldman Sachs and Morgan Stanley to advise it
if Pfizer (PFE) were to again attempt to talk with the company
about a takeover bid.
Meanwhile, shares of GlaxoSmithKline (GSK) tacked on 5.5% on
plans by Novartis AG to buy Glaxo's oncology unit for about $14.5
billion, while Novartis sells its vaccines unit to Glaxo for $5.25
billion. Also, the companies are planning to combine their consumer
divisions, which sell medication that doesn't require a
prescription.
Shares of biopharmaceutical firm Shire PLC were also pulled
higher, logging a gain of 5.9%. An estimated "robust" 13% earnings
per-share compound annual growth rate from 2013 through 2018, "at a
minimum given pipeline news and further cost control, justifies
upside for the shares," said Jefferies which on Tuesday reiterated
its buy rating on Shire.
But losing ground were miners, with Anglo American PLC down 0.3%
following a Financial Times report that the company is getting
ready to leave its platinum mines at Rustenberg in South Africa.
Labor strikes that have hurt the country's platinum sector are
among the factors Anglo American is assessing as it considers its
future at Rustenberg, according to the report.
Platinum prices on Monday dropped 2% as a pay offer by platinum
producers in South Africa fell short of union demands, which may
result in a strike by workers continuing for weeks, according to
Bloomberg.
Shares of Randgold Resources Ltd. were off 1.2%, Fresnillo PLC
shed 0.5% and Rio Tinto Ltd. (RIO) slipped 0.2%.
Investors in the U.K. market will soon likely have another stock
to watch, as Card Factory reportedly said it plans to list shares
on the London Stock Exchange next month. The greetings-card
specialist, which is majority owned by private equity group
Charterhouse Capital Partners, could raise up $90 million from the
float, according to Reuters.
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