London close: Equities close in the red on pharmaceuticals, ex-divi stocks

The FTSE ended lower on Thursday, led by pharmaceutical shares and ex-dividend stocks.

Pharmaceuticals were under the cosh following comments from US presidential favourite Hillary Clinton on pharma pricing overnight.

Clinton joined senators Susan Collins and Claire McCaskill in highlighting US-based Mylan's 480% hike in the price of its EpiPen epinephrine product since the company acquired it in 2007.

Following her remarks, Mylan said it was cutting the cost of the EpiPen 2-Pak through the use of a savings cards that will cover up to $300, effectively halving the price.

The news hit sector peers including FTSE 100 listed drug makers Hikma Pharmaceuticals, Shire and AstraZeneca.

Meanwhile, Dixons Carphone, Hammerson, Taylor Wimpey and Carnival also weighed on the FTSE as the stocks went ex-dividend.

On the upside, building materials group CRH rallied after winching its half-year dividend a touch higher as it reported the early stages of an economic recovery in Europe.

Broadcaster ITV was also on the front foot as it withdrew its proposed acquisition of Peppa Pig owner Entertainment One, refusing to up its offer after its initial bid was rejected, potentially leaving the door open for rumoured private equity bidder KKR. Entertainment One’s shares plunged.

On the macro-economic front, data showed UK gross mortgage lending fell in July as house purchase activity slowed in the aftermath of Britain’s vote to leave the European Union. The Council of Mortgage Lenders said gross mortgage lending dropped 0.9% year-on-year and 0.1% month-on-month in July to £21.4bn compared to £21.5bn in June.

Elsewhere, German business confidence unexpectedly deteriorated in August, according to a widely-followed survey. The Ifo Institute’s business climate index fell to 106.2 from 108.3 in July, missing expectations for a reading of 108.5.

Stateside, US durable goods orders jumped 4.4% in July, beating expectations for a 3.4% increase and following a 4.2% decline in June, the Commerce Department said.

The Labor Department revealed a better-than-expected reading on the state of the US jobs market. Initial jobless claims declined by 1,000 from the previous week’s unrevised level to 261,000, beating expectations for a jump to 265,000.

Markit’s flash US services purchasing managers’ index missed forecasts. The PMI printed at 50.9 in August, remaining above the 50.0 threshold that separates contraction from expansion but below July’s 51.4. This marked the lowest level since February and was weaker than consensus expectations for a reading of 52.0.

The mixed US data comes ahead of the Fed’s Jackson Hole conference on Friday. Fed chair Janet Yellen’s speech will be in focus for any remarks on whether the central bank feels the economy has strengthened enough to warrant an interest rate hike this year.

However, Neil Wilson, market analyst at ETX Capital, said “don’t expect much from Jackson Hole”.

"The Federal Reserve Bank of Kansas City’s annual economic policy symposium is a serious, sombre affair. It is not a policy meeting, nor is it meant to drive expectations for future policy decisions. It’s a talking shop and we should take the goods on offer with a healthy dose of salt.

"Markets are incredibly quiet this August (in sharp contrast to last year) so investors are latching on to anything they can, which gives this meeting a lot more attention than it probably deserves. Investors will hang on every word uttered by Janet Yellen, the Federal Reserve chair."

Before Jackson Hole, Kansas City Fed President Esther George told CNBC she believes it is time to increase interest rates. However, she stressed: "It doesn't mean I favour high rates. It doesn't mean I think it needs to happen rapidly."

Market Movers

FTSE 100 (UKX) 6,817.85 -0.26%
FTSE 250 (MCX) 17,867.00 -0.82%
techMARK (TASX) 3,469.90 -0.87%

FTSE 100 - Risers

CRH (CRH) 2,540.00p 2.88%
Marks & Spencer Group (MKS) 346.90p 2.63%
Sky (SKY) 875.00p 1.86%
Ashtead Group (AHT) 1,257.00p 1.37%
WPP (WPP) 1,803.00p 1.29%
National Grid (NG.) 1,075.00p 1.08%
United Utilities Group (UU.) 978.50p 0.98%
Unilever (ULVR) 3,559.50p 0.94%
Severn Trent (SVT) 2,414.00p 0.88%
Mondi (MNDI) 1,586.00p 0.76%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,150.00p -3.50%
Dixons Carphone (DC.) 375.00p -3.10%
Hammerson (HMSO) 573.50p -2.88%
Glencore (GLEN) 179.05p -2.69%
Taylor Wimpey (TW.) 164.20p -2.55%
Shire Plc (SHP) 4,902.00p -2.45%
Rolls-Royce Holdings (RR.) 773.00p -1.97%
International Consolidated Airlines Group SA (CDI) (IAG) 394.20p -1.87%
Capita (CPI) 1,042.00p -1.79%
Paddy Power Betfair (PPB) 9,565.00p -1.75%

FTSE 250 - Risers

Aldermore Group (ALD) 160.10p 8.91%
Shawbrook Group (SHAW) 220.00p 7.68%
John Laing Group (JLG) 252.70p 6.94%
OneSavings Bank (OSB) 288.30p 3.97%
Playtech (PTEC) 928.00p 3.17%
Ibstock (IBST) 180.40p 3.09%
Spire Healthcare Group (SPI) 352.00p 2.62%
CLS Holdings (CLI) 1,538.00p 2.53%
Smurfit Kappa Group (SKG) 1,873.00p 2.52%
CMC Markets (CMCX) 276.70p 2.41%

FTSE 250 - Fallers

Entertainment One Limited (ETO) 215.70p -14.00%
Allied Minds (ALM) 383.90p -6.14%
Euromoney Institutional Investor (ERM) 1,025.00p -5.18%
Hochschild Mining (HOC) 270.00p -4.93%
Carillion (CLLN) 282.00p -4.79%
Just Eat (JE.) 545.00p -4.22%
Ascential (ASCL) 258.20p -3.80%
Countrywide (CWD) 262.40p -3.32%
PayPoint (PAY) 987.50p -3.19%
Safestore Holdings (SAFE) 357.00p -3.17%