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Gaurav Sharma Sharecast News
02 Dec, 2015 14:08 02 Dec, 2015 17:11

Sector movers: Pharmaceutical stocks see uptick as resource stocks tumble

A decline in natural resource stocks was evened out by pharmaceutical companies on Wednesday, sending the London market sideways, albeit marginally towards the positive side.

FTSE 100

8,060.61

15:45 15/11/24
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FTSE 250

20,508.75

15:45 15/11/24
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Moments prior to the close, FTSE 100 was up 0.46% or 29.16 points at 6,424.81, while the FTSE 250 was up 0.21% or 36.99 points at 17,553.75. Pharmaceutical companies led the blue chip risers with Shire (up 2.57%), GlaxoSmithKline (2.18%) and AstraZeneca (1.78%) being the standout gainers following a positive sector note from Morgan Stanley.

The investment bank upgraded AstraZeneca to ‘overweight’ from ‘underweight’ and adding the pharmaceutical company was among its top picks. MS, which lifted AZN’s target price to 5,300p from 4,300p, said it has underperformed dramatically over the past year but looks set to reap the rewards of heavy investment, at an attractive valuation.

MS also raised its price target on ‘equalweight’ rated GlaxoSmithKline to 1,450p from 1,350p, saying expectations have likely bottomed out after several years of continuous earnings per share downgrades.

Meanwhile, natural resource mid to large caps continued to struggle, faced with a lacklustre metals market and lower oil prices. At 1540 GMT, the Brent front-month futures contract was down 1.62% or 72 cents to $43.72 per barrel while WTI was down 1.96% or 82 cents to $41.03 per barrel, as a relatively stronger dollar and oil oversupply concerns, ahead of the meeting of OPEC ministers on 4 December, piled further pressure on both benchmarks.

Base metals saw flat to negative trading on the London Metal Exchange. The three-month copper delivery futures contract registered a 0.6% decline to $4,581.50 per metric tonne, staying within range of six-year lows, as Chinese producers opted over the weekend to introduce production cuts.

Last week, Chile, the world’s largest producer of copper, announced its intention to focus on cost cuts rather than production cuts for the moment. Additionally, lead (down 0.3%), tin (up 0.7%), zinc (down 1.5%) and primary aluminium (up 1.1%) futures painted a mixed picture.

Anglo American (down 2.23%) was among the biggest FTSE 100 fallers of the session, second only to Asia-focussed Standard Chartered Bank (down 2.25%). Midcap resource stocks Petra Diamonds (down 4.15%), Evraz (down 3.77%) and Premier Oil (down 3.46%) were among the biggest FTSE 250 fallers.

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