Sector Movers: Pharma stocks pull London market back to positive turf

An uptick in pharmaceutical stocks on Wednesday, in tandem with an oil price rise ensured that headline London indices ended back up in positive territory.

At the close of proceedings, the FTSE 100 ended 1.16% or 70.40 points higher at 6161.63, while the FTSE 250 closed 0.84% or 140.52 points higher at 16,866.11. Oil futures reversed declines following bullish comments from OPEC member Kuwait and an unexpected decline US crude inventories.

Kuwait’s Governor for the Organization of Petroleum Exporting Countries (OPEC), Nawal Al-Fuzaia, said she was confident both OPEC and non-OPEC members will go along with plans to cut crude output at the upcoming meeting in Qatar on 17 April.

Later in the session, US Department of Energy’s statistical arm – the Energy Information Administration – said American crude oil inventories fell 4.9m barrels in the week to April 1, compared with analysts' expectations for an increase of a 3.1-3.2m barrels.

Crude stocks at the US oil delivery hub of Cushing, Oklahoma, rose 357,000 barrels, the EIA added. Concurrently, US crude imports fell by 446,000 barrels per day, owing to weather issues in the Houston Ship Channel in the state of Texas last week.

At 1742 BST, the Brent front month futures contract was up 5.25% or $1.99 to $39.86 per barrel, while WTI futures gained 5.21% or $1.87 at $37.76 per barrel.

Away from oil markets, the precious metals rally came to a halt as traders booked profits. The COMEX gold June futures contract fell 0.41% or $5.10 to $1224.50 an ounce, while spot gold was down 0.71% or $8.71 to $1,222.64 an ounce.

COMEX silver fell 0.30% or five cents to $15.07 an ounce, while spot platinum also fell 0.89% or $8.50 to $943.55 an ounce.

Headline base metal futures endured mixed fortunes on the London Metal Exchange. At 1635 BST, three-month futures contracts of primary aluminium (-0.3%) and zinc (-1.0%) were in negative territory, but lead (+0.9%), tin (+0.8%) and copper (+0.4%) headed higher.

Oil and gas stocks had a better session but diversified miner Glencore (-1.23%) was among the worst FTSE 100 performers alongside airline stocks. Budget airline easyJet (-3.02%) flew lower after it reported a rise in passenger numbers in March but a drop in the load factor.

A total of 5,728,114 passengers flew during the month, up 4.3% on a year earlier. On a rolling 12 month basis to 31 March, the airline carried 70,761,515 passengers, up 7.2% on the prior 12 months.

The airline's load factor in March was 91.3%, down 1.3 percentage points on March 2015, while its rolling 12-month load factor of 91.5% was an improvement of 0.6 percentage points. Rival and British Airways’ owner International Consolidated Airlines Group (-2.55%) also slipped lower.

However, positive movement that dominated the session belonged to the pharmaceutical sector as investors bet that the termination of Pfizer’s agreement to buy Allergan might make the London-listed companies bid targets.

Shire (up 5.16%) led FTSE 100 as its biggest gainer, with AstraZeneca (+4.47%) and GlaxoSmithKline (+3.00%) in close proximity, as Pfizer confirmed that its $160bn agreement to buy Allergan has been terminated by mutual agreement after the US Treasury announced new measures to curb tax inversions.