London close: Stocks flat as miners rally, pharmaceuticals slump
The FTSE 100 finished flat as investors weighed a rally in mining shares against a slump in pharmaceuticals.
The index rose 0.03% to 7,292.37 points.
Mining shares gained on the back of a weaker dollar after a key speech by US President-elect Donald Trump on Wednesday disappointed markets over his lack of clarity on policies.
FXTM research analyst Lukman Otunuga said: “While the news conference covered topics about the Russian hacking reports, Trump's separation of his business empire and repeated criticism of the media, the lack of details of the President-elect’s administration’s plans for economic stimulus simply left dollar bullish investors empty handed. It seems likely that dollar sensitivity intensifies this month as the renewed Trump uncertainty keeps investors on edge.”
An increase in gold, silver and copper prices also gave miners a lift with Randgold Resources, Fresnillo and Anglo American in the black.
Going the other way, drug makers Shire, Hikma Pharmaceuticals and Astrazeneca were among the biggest fallers on the FTSE after Trump said that he would force the industry to bid for government business.
His remarks in New York were unexpected as they align him with congressional Democrats who have campaigned to lower drug prices.
Elsewhere, Direct Line Insurance Group’s shares declined after Macquarie Research downgraded the stock to ‘underperform’ from ‘neutral’ and cut the target price to 345p from 295p.
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.
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%.
Department store Debenhams advanced after saying like-for-like sales rose 5% in the seven-week Christmas period.
On the data front, the US Labor Department said the number of Americans filing for unemployment benefits rose less than expected last week. US initial jobless claims were up 10,000 to 247,000 from the previous week’s level, which was revised up by 2,000. Economists had been expecting a bigger jump to 255,000.
Meanwhile, Philadelphia Federal Reserve President Patrick Harper said the US economy is showing strength and reiterated the central bank’s expectation for three interest rate hikes this year.
Chicago Fed President Charles Evans spoke at a separate event, saying aggressive fiscal policies may help Trump achieve his target of 4% growth but it could not be sustained without bigger changes to the economy.
He said while the economy is near full employment and the labour market is "pretty good...if you have the skills", an aging population, weak productivity growth, and falling labour force participation put constraints on the new administration.
St. Louis Fed President James Bullard said in an interview with CNBC that Trump’s policies will have little impact this year and are more a story for 2018-2019. He said he believes the economy remains in a low interest-rate and slow growth environment that will not change by "snapping fingers".
Still to come, Fed Chair Janet Yellen will speak at a town hall event after the close. The Fed’s James Bullard and Robert Kaplan are also due to speak.
Market Movers
FTSE 100 (UKX) 7,292.37 0.03%
FTSE 250 (MCX) 18,303.50 -0.49%
techMARK (TASX) 3,401.08 -0.81%
FTSE 100 - Risers
Mondi (MNDI) 1,742.00p 5.58%
Smurfit Kappa Group (SKG) 2,153.00p 3.76%
Randgold Resources Ltd. (RRS) 6,795.00p 3.58%
Fresnillo (FRES) 1,422.00p 2.97%
RSA Insurance Group (RSA) 578.00p 2.66%
Anglo American (AAL) 1,310.50p 1.98%
National Grid (NG.) 950.60p 1.80%
Rio Tinto (RIO) 3,404.50p 1.75%
Reckitt Benckiser Group (RB.) 6,848.00p 1.38%
Marks & Spencer Group (MKS) 344.90p 1.32%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,576.00p -4.52%
Dixons Carphone (DC.) 346.80p -2.86%
Shire Plc (SHP) 4,555.00p -2.70%
Next (NXT) 4,033.00p -2.51%
Hikma Pharmaceuticals (HIK) 1,859.00p -2.36%
Carnival (CCL) 4,218.00p -2.29%
Royal Bank of Scotland Group (RBS) 218.50p -1.89%
easyJet (EZJ) 1,036.00p -1.80%
ITV (ITV) 203.00p -1.69%
Direct Line Insurance Group (DLG) 346.70p -1.56%
FTSE 250 - Risers
Savills (SVS) 785.00p 13.69%
JD Sports Fashion (JD.) 350.00p 7.56%
Debenhams (DEB) 57.30p 5.43%
Acacia Mining (ACA) 420.60p 4.94%
Vedanta Resources (VED) 1,002.00p 4.70%
Kaz Minerals (KAZ) 431.10p 4.21%
Ted Baker (TED) 2,900.00p 4.17%
Centamin (DI) (CEY) 151.20p 3.85%
Hochschild Mining (HOC) 231.10p 3.77%
Evraz (EVR) 228.20p 2.47%
FTSE 250 - Fallers
AO World (AO.) 162.30p -11.94%
Spire Healthcare Group (SPI) 308.30p -10.66%
Dunelm Group (DNLM) 742.00p -6.90%
Jupiter Fund Management (JUP) 416.00p -6.52%
SIG (SHI) 93.80p -5.78%
Inmarsat (ISAT) 711.50p -5.07%
Nostrum Oil & Gas (NOG) 478.80p -4.53%
Worldwide Healthcare Trust (WWH) 2,178.00p -4.38%
Daejan Holdings (DJAN) 6,000.00p -4.15%
Ferrexpo (FXPO) 135.00p -3.57%