London midday: Pharmaceuticals under the cosh in slightly weaker UK market
London stocks dipped on Thursday, with pharmaceutical shares under pressure after US President-elect Donald Trump promised to lower drug prices at a key news conference.
At midday, the FTSE 100 was down 0.06% to 7,286.19 points.
Drug makers Shire, Hikma Pharmaceuticals and Astrazeneca were among the biggest fallers on the FTSE after Trump said on Wednesday that he would force the industry to bid for government business.
“They’re getting away with murder,” Trump said at a press conference in New York. “Pharma has a lot of lobbyists and a lot of power and there is very little bidding. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to save billions of dollars.”
His remarks in New York were unexpected as they align him with congressional Democrats who have campaigned to lower drug prices.
The dollar weakened against major currencies following Trump’s press conference, giving commodities producers a boost.
Fresnillo, Randgold Resources and Rio Tinto were the top risers on the FTSE.
Elsewhere, Burberry continued to rise a day after Barclays upgraded the luxury retailer to ‘overweight’ from ‘equalweight’ and upped the price target to 1,760p from 1,450p on strategy and valuation.
Department store Debenhams advanced after saying like-for-like sales rose 5% in the seven-week Christmas period.
Marks & Spencer rallied as it said third-quarter revenue rose, with investors particularly pleased that its embattled clothing division saw sales growth for the first time in nearly two years.
JD Sports Fashion surged as it said headline pre-tax profit for the current financial year is likely to be ahead of consensus market expectations of £200m by up to 15%.
In contrast, Associated British Foods slumped despite reporting that group revenue from continuing operations was 10% ahead of the same period last year at constant currency, with good growth delivered by all of its business arms.
Online electrical retailer AO World plunged after posting a 12.3% jump in third-quarter revenue and saying it is on track to meet guidance for the fiscal year.
Housebuilder Barratt Developments fell as it said pre-tax profit for the six months to the end of December is expected to be up 7% on the same period a year ago, with overall market conditions healthy amid strong demand for new homes.
Tesco was weaker despite notching an eighth consecutive quarter of like-for-like growth and its first quarterly market share gain in five years. Over the 13 weeks ended 26 November that made up the third quarter, UK LFL sales rose 1.8% although slowed to 0.7% in the six Christmas weeks to 7 January.
There are no UK data releases of note due but in the US, initial jobless claims are at 1330 GMT.
After London’s close, Federal Reserve chair Janet Yellen will speak at a town hall event. Central bank officials James Bullard, Robert Kaplan and Dennis Lockhart are also due to speak.
Craig Erlam, senior market analyst at Oanda, said he expects the Fed speakers will reiterate the central bank’s intention to raise interest rates three times this year.
“I doubt their views will have changed too much since the December meeting given that we are none-the-wiser when it comes to Trump’s fiscal and tax plans and the data we’ve had since has been good but probably in line with their expectations,” he said.
“It will be interesting to see whether the Fed manages to stabilise the dollar, with the greenback having come under a lot of pressure following Trump’s comments.”
Market Movers
FTSE 100 (UKX) 7,284.11 -0.09%
FTSE 250 (MCX) 18,331.24 -0.34%
techMARK (TASX) 3,394.87 -0.99%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,855.00p 4.50%
Fresnillo (FRES) 1,434.00p 3.84%
Mondi (MNDI) 1,707.00p 3.45%
Rio Tinto (RIO) 3,457.50p 3.33%
BHP Billiton (BLT) 1,464.50p 3.13%
Anglo American (AAL) 1,325.00p 3.11%
Smurfit Kappa Group (SKG) 2,124.00p 2.36%
Glencore (GLEN) 317.15p 2.31%
National Grid (NG.) 948.30p 1.55%
GKN (GKN) 339.20p 1.28%
FTSE 100 - Fallers
Shire Plc (SHP) 4,519.50p -3.46%
Associated British Foods (ABF) 2,609.00p -3.30%
Hikma Pharmaceuticals (HIK) 1,854.00p -2.63%
Tesco (TSCO) 203.70p -2.44%
Dixons Carphone (DC.) 349.70p -2.04%
AstraZeneca (AZN) 4,500.00p -1.68%
Sainsbury (J) (SBRY) 257.10p -1.64%
Hammerson (HMSO) 564.50p -1.57%
Smith & Nephew (SN.) 1,210.00p -1.55%
ITV (ITV) 203.40p -1.50%
FTSE 250 - Risers
JD Sports Fashion (JD.) 353.90p 8.76%
Savills (SVS) 745.50p 7.97%
Debenhams (DEB) 57.15p 5.15%
Centamin (DI) (CEY) 152.20p 4.53%
Hochschild Mining (HOC) 232.60p 4.45%
Evraz (EVR) 230.80p 3.64%
Ted Baker (TED) 2,884.00p 3.59%
Acacia Mining (ACA) 412.30p 2.87%
Kaz Minerals (KAZ) 425.50p 2.85%
Investec (INVP) 564.50p 2.54%
FTSE 250 - Fallers
Spire Healthcare Group (SPI) 314.20p -8.95%
AO World (AO.) 169.30p -8.14%
Jupiter Fund Management (JUP) 417.70p -6.13%
Inmarsat (ISAT) 714.00p -4.74%
SIG (SHI) 94.85p -4.72%
Dunelm Group (DNLM) 759.50p -4.71%
BTG (BTG) 584.50p -4.10%
Worldwide Healthcare Trust (WWH) 2,192.00p -3.90%
Allied Minds (ALM) 427.20p -3.74%
Bovis Homes Group (BVS) 819.50p -2.73%