Sector movers: Royal Mail perks up delivery stocks, pharmaceuticals post gains on Shire

Delivery, oil and gas, and pharmaceutical stocks largely kept trading in London on track over a lacklustre day for the FTSE 100.

At 16:44 BST on Thursday, the blue chip index was trading at 6943.25 marginally down by 3.03 points or 0.4% with delivery and pharmaceutical stocks edging higher on individual positivity from Royal Mail (up 5.07%) and Shire (up 1.04%) respectively.

Royal Mail rose on news that Dutch firm PostNL had scrapped plans to expand its Whistl delivery service in the UK. Positivity transferred to other stocks in the sector taking it to the top of the performers’ charts in intraday trading.

In the pharmaceutical and healthcare segment, earnings at Shire surged 20% in the first quarter as sales at the Dublin-headquartered drug company overcame a sharp drop in its Intuniv attention deficit disorder drug and dollar headwinds.

Revenues grew 15% to $1.49bn thanks to 13% growth in product sales as other drugs stepped up to replace a 79% fall in Intuitiv due to competition from generic rivals.

Smith & Nephew also lent support to the sector by posting a slight increase in first-quarter revenue and reiterated its expectations for 2015. In the three months to 28 March, the company recorded a 3% rise in revenue from the year before to $1.10bn (£710m), as strong revenue in emerging markets offset sluggish growth in the US and Europe. The company’s shares were broadly flat.

Oil and gas shares index was also among segments in the green trading up 46.10 points or 0.62% at 7,528.84 largely down to less disappointing numbers from oil major Shell (up 0.37%). The company saw unadjusted profits sink in the first quarter on the back of depressed crude prices, though results were much better than analysts had feared.

The Anglo-Dutch oil giant, set to take over BG Group in a £47bn deal, also trimmed its capital expenditure budget for this year.

Current cost of supplies (CCS) earnings excluding so-called 'identified items' totalled just $3.25bn in the first three months of 2015, down 56% from $7.33bn the year before. However, this was much better than $2.5bn pencilled in by analysts with the downstream refining and trading division performing much better than expected.

Weir Group (up 2.56%) was also trading positively recouping earlier losses. While news from Shell partially buoyed the sector, much of its players remained in the red posting tepid trading data as the session progressed. Industrial services group James Fisher (down 13.73%) warned that first-half results would be lower than last year after its offshore oil arm suffered a "slow start" to 2015.

RPS Group (down 9.78%) said it was feeling the impact of the continuing volatility in the oil and gas sector. The company also announced the £22.3m purchase of Norwegian project management and training company Metier Holding but with market responding via a sharp sell-off in its shares.

Meanwhile, Greggs (up 3.64%) extended gains on Wednesday’s positive trading data for a second day running. Associated British Foods (up 2.51%) also got a positive response from traders. However, the positivity did not filter through to the wider food retail segment, as jitters over sustainable economic growth and an uncertain outcome of the UK general election continue to hound the market.

Top five sectors

Delivery & Transportation 2,908.79 +56.60 +1.98%
Oil & Gas Producers 7,528.84 +46.10 +0.62%
Pharmaceuticals & Biotechnology 13,611.30 +67.64 +0.50%
Food Producers 7,739.92 +100.96 +0.45%
Household Goods & Home Construction 14,320.89 +104.23 +0.45%