FTSE 100 led lower by AstraZeneca after cancer trial failure; US stocks open higher



  • FTSE 100 closes over nine down



  • sees £10bn wiped from its valuation after cancer trial setback



  • Diageo top riser


While US stocks advanced, FTSE 100 closed the day over nine points down, with shares taking a huge hit.


The FTSE 250 fared much better, with the index adding 116 to close at 19,879, while FTSE 100 closed at 7,443.


On Wall Street at the time of writing, the Dow Jones is up 57 points, while the S&P 500 is 2.7 ahead as investors greet the latest wave of positive quarterly earnings.


David Madden, at CMC Markets, said: “Indices on this side of the pond don’t have the enthusiasm as the US ones do, and it is a bit concerning when European markets can’t be spurred on by the record highs in America.”


“In Europe, investors will happily use disappointing corporate results as an excuse to exit the equity markets, but the opposite isn’t true when companies post positive figures.”


On Footsie, the top riser was Guinness owner () after it delivered net sales growth slightly above expectations in the first half. Shares added 5.98% to 2,408.5p.


Its operating profit climbed an impressive 25% to £3.6bn for the year ending in June, while reported net sales climbed 15% to £12.1bn.


Meanwhile, PLC () was also a big gainer, adding 5.82% to 290.8p after its profits surged by more than 600% in the last six months.


Weighing considerably was AstraZeneca plc () which lost a massive  15.31%to 4,325p after its highly-anticipated MYSTIC lung cancer trial missed the first endpoint of its phase III clinical trial.


The study is seen as pivotal for the drugmaker and investors were quick to jump ship.


 


3.30pm 


The FTSE 100 has managed to limit its losses so far today, despite a couple of big names acting as major drags on the index.


The blue chip index is currently 10 points lower at 7,442 shortly before the markets shut up shop for the day.


Devastating day for Astra


Unsurprisingly, PLC () is still the top faller among the big boys, down a whopping 16% to £43 after its highly-anticipated MYSTIC lung cancer trial missed the first endpoint of its phase III clinical trial.


The study is seen as pivotal for the drugmaker and investors were quick to jump ship when the disappointing news dropped this morning.


Another big name keeping the Footsie in the red was PLC (), with the lender’s biggest profit in eight years still not enough to impress investors as the PPI scandal reared its ugly ahead again.


Shares dropped 2% to 67.6p this afternoon as Lloyds was forced to set aside another £1bn in conduct charges related to PPI and its treatment of mortgage customers.


British energy provider () was also out of favour, down 5.3% to £13.83 as it went ex-dividend today.


Diageo and Rentokil top risers 


Guinness owner () was still the big winner from the ‘Super Thursday’ results extravaganza as it surged by 6.5% to £24.20 after delivering net sales growth slightly above expectations in the first half.


Analysts had forecast year-on-year organic net sales growth of 4.2%, but the Johnnie Walker whisky producer delivered growth of 4.3% or organic volume growth of 1.1%.


Rat catcher PLC () was also in positive territory, up 6.1% to 291.5p, after its profits surged by more than 600% in the last six months.


Copper price hits two-year high


South African mining giant PLC () was up 3% to £12.30 after it announced it would be returning to the dividend list six months earlier than expected.


Back in 2015 Anglo said it would suspend the divi following the drop in commodity prices, but it has resumed payouts to investors after a strong six months in which net debt fell and underlying earnings soared.


In fact, miners in general have performed well so far today benefited by the wave of more bullish sentiment that seems to be sweeping through the sector.


Broadly speaking, metals prices are doing quite well at the moment, particularly copper which has hit its highest level for two years.


That obviously bodes well for the likes of PLC () (up 1% to £34.94), () (up  0.9% to £13.64) and Glencore PLC () (up 0.6% to 331.7p) which are all in the black today.


The markets in the US got off to a better start, with the Dow Jones building on yesterday’s all-time closing high to hit 21,764 – a 53 point gain.


The Nasdaq Composite is so far up 0.5%, or 30 points, to 6,453, although it was a quieter start for the S&P 500 which is just 0.1%, or 2 points, in the black at 2,480.2.


Jeff Bezos closing in on ‘world’s richest man’ title


Corporation () founder Bill Gates has held the position of world’s richest man since May 2013, but it seems there’s a new sheriff in town.


After Inc’s (NYSE:AMZN) 1.2% rise shortly after the opening bell in New York this morning, its boss Jeff Bezos added another US$1bn to his net worth and is now within touching distance of stealing Gates’ crown.


Amazon’s market value is now US$508bn and Bezos still holds a 17% stake, which is worth a whopping US$86bn on its own.


Bloomberg reckons his total net worth is US$89.8bn, ‘only’ US$1bn shy of Gates who’s at US$90.8bn.


 


3pm…Dave Ramsden appointed as Bank of England’s new deputy governor


The government has appointed the Treasury’s chief economic adviser Sir Dave Ramsden as the new deputy governor of the Bank of England.


Ramsden will take over from Charlotte Hogg on 4 September, after she resigned for failing to notify the bank that her brother worked in a senior strategy role at .


“I am honoured to be joining the Bank and to be given the opportunity to contribute to the Bank’s mission to maintain monetary and financial stability, at such an important time for the UK economy,” he said.


 


2.30pm…Does Sky need Premier League football?


Sky PLC () is relatively unmoved today despite concerns over its long-term profitability being raised in its interims this morning.


The new Premier League football TV rights deal that came into force at the start of last season (last August) cost the broadcaster almost £700mln – a substantial raise on the previous contract.


That ate into profits which slipped by £97mln despite a 5% rise in revenues to £12.9bn.


Given the (almost) crippling cost of the new Premier League deal, a simple solution might be to drop the coverage altogether.


Jamie Ashcroft looks at why that isn’t possible though and why Sky, regardless of cost, needs that contract.


 


1.35pm…FTSE holding its own


That the FTSE 100 is only nursing some minor losses in early afternoon is something of a victory in itself.


The blue chip index is (only) 13 points, or 0.16%, down on yesterday’s close at 7,439, despite the immense weight of drugs giant PLC () dragging on it.


Astra and Glaxo head lower


The UK drugmaker is down 15.5% to £43.22 after its highly-anticipated MYSTIC lung cancer trial – which analysts have said will be key to Astra’s future – disappointed with its initial results.


Fellow pharma () was also headed lower as yesterday’s earnings downgrade continued to displease the markets. Its fall was nowhere near as dramatic as Astra’s though, down 1.3% to £15.25.


Another big name keeping the Footsie in the red was PLC (), with the lender’s biggest profit in eight years still not enough to impress investors as the PPI scandal reared its ugly ahead again.


Shares dropped 3% to 67p by early afternoon as Lloyds was forced to set aside another £1bn in conduct charges related to PPI and its treatment of mortgage customers.


Diageo and Rentokil big Footsie winners


Guinness owner () was still the big winner from the ‘Super Thursday’ results extravaganza as it surged by 6.8% to £24.27 after delivering net sales growth slightly above expectations in the first half.


Analysts had forecast year-on-year organic net sales growth of 4.2%, but the Johnnie Walker whisky producer delivered growth of 4.3% or organic volume growth of 1.1%.


Rat catcher PLC () was also in positive territory, up 4.2% to 286.3p, after its profits surged by more than 600% in the last six months.


Miners buoyant as copper price hits two-year high


South African mining giant PLC () was up 3.7% to £12.39 after it announced it would be returning to the dividend list six months earlier than expected.


Back in 2015 Anglo said it would suspend the divi following the drop in commodity prices, but it has resumed payouts to investors after a strong six months in which net debt fell and underlying earnings soared.


In fact, miners in general have performed well so far today benefited by the wave of more bullish sentiment that seems to be sweeping through the sector.


Broadly speaking, metals prices are doing quite well at the moment, particularly copper which has hit its highest level for two years.


That obviously bodes well for the likes of Antofagasta PLC () (up 0.5% to 949p), () (up  0.8% to £13.64) and Glencore PLC () (up 0.4% to 33.9p) which are all in the black today.


Positive start expected for US markets


The Dow Jones hit an all-time yesterday and, although it’s far from setting anything on fire, it looks set make some modest gains in early doors today.


Spread bet firms are tipping the index to rise by 15 points or so at the opening bell to 21,722, while the Nasdaq is set for a stronger start and is seen opening 39 points higher at 5,990.


The S&P 500 rounds off the trio and that index is expected to register a 3 point gain to 2,480.9 when it opens shortly.


“Having hit a 21700-plus all-time high yesterday evening the Dow Jones looks a bit spent this Thursday,” said analyst Connor Campbell.


“The futures are pointing to a meagre 15 point rise after the bell, though the index could gather steam once a few more US traders are awake.


“Data-wise it’s the turn of the durable goods orders reading in the spotlight; analysts are expecting a slight increase, from 0.3% to 0.4% month-on-month.”


 


12.30pm…Newcastle becomes first airport to sell takeaway kebabs


Howay the lads! If you happen to be flying out of Newcastle this summer, consider yourself very lucky.


It has nothing to do with flights being on time, good customer service or cleanliness, it’s far more important than that.


For Newcastle Airport has become the first in the UK to open up a kebab shop in the heart of its departure lounge.


It’s not quite the garlic mayo-drenched, heart burn-inducing stodge one might enjoy after a night on the tile, though.


Pita and Brew opened its doors earlier this week to hungry fliers after a surge in demand for healthier options.


Kebab choices include the standard doner meat, pulled pork, pulled chicken as well as grilled halloumi. At £6.95 a chuck it’s not terribly priced for airport grub either.


You can eat inside the restaurant or if you really hate your fellow man, get it wrapped up and take it on the plane with you.


 


11.55am…Australia wants ‘high-quality’ post-Brexit trade deal


*CHOO CHOO* The Brexit train is on the move this morning after Australian foreign minister Julie Bishop said she hopes to strike a “high-quality, comprehensive free trade agreement” with the UK once it leaves the EU.


She was speaking alongside hairdresser’s dream and UK foreign secretary Boris Johnson. BoJo said the UK would be “friendly and receptive” to Australian “talent” coming over to work following EU withdrawal.


The visit obviously couldn’t pass without Boris stealing the headlines for his choice of words…


 


11.40am…CBI: Warm weather boosts retail sales


Another week and another report telling us that the recent spell of warm weather was good news for retailers.


According to the Confederation of British Industry’s latest Distributive Trades Survey, sales volumes grew at a “healthy pace” in the year to July – particularly grocery and clothing sales.


“The warm summer has added a sizzle to our high streets as shoppers defied expectations, with sales growth in clothing shops and grocers driving overall performance,” said CBI head of economic intelligence Anna Leach.


“But while retailers expect a similar pace of growth next month, the factors underpinning their sales growth are more shaky.


“Although employment is strong, real incomes are falling in the wake of higher inflation, and that’s expected to feed slower consumer spending growth ahead.”


 


11.15am…Bleak signs for property market


Things are looking bleak for the UK property market if the half-year results from PLC () and PLC () this morning are anything to go by.


Sales at London estate agent were 15% lower at £58.5mln while profits dived to £3.8mln from 10.5mln a year earlier.


, which operates the Hamptons International and Taylors brands among others, recorded a hefty fall in pre-tax prfoits from £8.4mln in the first six months of 2016 to just £447mln this time around.


“ blamed ‘unprecedented economic and political uncertainty’ for the slump in revenues and profits,” said ETX Capital analyst Neil Wilson.


“Certainly the London market has been the worst hit and ’ exposure to this made it more vulnerable.


“ suffered a similar meltdown in profits in the first half, with pre-tax profits collapsing 98% to less than half a million pounds.


“Both are cutting costs to fight the drop in activity. said total costs are down £27 million year on year, while reported a £3.7m reduction in costs.


“Shares in the pair remain depressed since the Brexit referendum and there is precious little to see this changing soon.”


 


10.20am…, GSK and Lloyds weigh on FTSE


The FTSE 100 has enjoyed a decent run over the past couple of days and some solid results from the wealth of big names reporting their half-year results today could have propelled it over the 7,500 level.


It’s not quite turned out like that though and the blue chip index is currently 0.1%, or 6 points, lower at 7,447.


Horrible day for


To be honest, given the collapse of PLC () this morning, it’s a wonder the index isn’t nursing more substantial losses.


Investors in the UK drugmaker have been waiting anxiously for months for news on the MYSTIC lung cancer trial, which is seen by many to be pivotal to the company’s future.


The initial results came in today and it wasn’t good for Astra or its shareholders; the highly-anticipated durva-treme combo treatment failed to do anything more than standard chemotherapy.


The pharma giant tried to play it down and said the real focus should be on data due out early next year but, regardless of what Astra had to say, it was a massive setback and investors knew it.


The stock is down 16% to £42.98 this morning and is acting as a heavy weight on the Footsie. Only a few weeks ago, you’d have had to part with £55 to get your hands on an AZN share.


Lloyds down as PPI storm rages on


PLC () was also dragging on the FTSE 100 as the lender’s biggest profit in eight years wasn’t enough to impress investors as the PPI scandal reared its ugly ahead again.


Shares dropped 2.3% to 67.5p in early deals as Lloyds was forced to set aside another £1bn in conduct charges related to PPI and its treatment of mortgage customers.


Two of yesterday’s big fallers, () and engineering group PLC () were in the red once again today as well.


Diageo and top risers list


The big winner from the ‘Super Thursday’ results extravaganza was Guinness owner () which surged by 6.6% to £24.24 after it delivered net sales growth slightly above expectations in the first half.


Analysts had forecast year-on-year organic net sales growth of 4.2%, but the Johnnie Walker whisky producer delivered growth of 4.3% or organic volume growth of 1.1%.


South African mining giant PLC () was also in favour after it announced it would be returning to the dividend list six months earlier than expected.


Back in 2015 Anglo said it would suspend the divi following the drop in commodity prices, but it has resumed payouts to investors after a strong six months in which net debt fell and underlying earnings soared.


Shares in the miner are currently up by 3.7%, putting it second in the top FTSE 100 riser list this morning.


 


9am…Astra hit for £10bn


The big news of the day was stock specific, with investor in () hitting the panic button following the failure of its lung cancer drug at the final regulatory hurdle.


A lot of hope and expectation was priced into the stock. This not so much ebbed away as gushed, with the stock off almost 16% in early trade. That equates to a massive £10bn from the value of the business and probably puts AZ back in the shop window for potential acquirers. Read more here.


The drag provided by plummeting shares in the Anglo-Swedish pharma giant, which has a track record of self-inflicted wounds, subdued the FTSE 100 with the index of blue-chip shares up just five points at 7,457.33.


‘s () biggest profit in eight years wasn’t enough to impress a sceptical City audience more interested in the long tail of PPI claims.


On a positive note, shares in the Guinness-maker Diageo () were up 5% early after better-than-forecast earnings.


6.45am…subdued start predicted


London’s FTSE 100 is set to start Thursday higher, albeit only very slightly.


There’s positivity in global equity markets and commodities – notably crude oil and copper – and Wall Street again set a new high tide marker, helped by positive quarterly earnings for blue-chip names.


As President Donald Trump became embroiled in another controversy, this time his comments about LGBTQ in the military, Wall Street investors are seemingly able to find other things to focus on.


As well as corporate earnings, the Federal Reserve’s position on interest rates remains an important steer for US investors – though changes, if and when they arise, tend to be well flagged ahead of time. Wednesday’s Fed meeting did not see any real changes.


“As expected last nights Fed meeting came and went without much fanfare, and without any surprises,” said Michael Hewson, analyst at CMC Markets.


“The only changes of note were in relation to the wording with respect to the timing of when officials would look to begin the task of paring back the balance sheet. Instead of making reference to sometime this year the wording was altered to “relatively soon” though this had the important caveat of as long as the economy evolves as expected.


“This would appear to suggest that the Fed might be looking at September to announce a possible start date, though given the dysfunctional state of US politics this date could slip given recent comments from President Trump that a debt ceiling spat and a government shutdown might be on the cards, at around that time.”


On Wednesday, the Dow Jones closed nearly 100 points, 0.45%, higher at 21,711 while the S&P 500 moved only smidgen higher to 2,477. The Nasdaq, meanwhile, added 0.16% to close the session at 6,422.


In Asia, Japan’s Nikkei rose 0.47% to 20,147 while Hong Kong’s Hang Seng also climbed around 0.48% to 27,068.


The Shanghai Composite moved only slightly into positive territory, to trade at 3,249.


Australia’s ASX 200 advanced around 0.2% to 5,789.


In London, CFD and spreadbetting group IG Markets sees the FTSE 100 just slightly – I point – higher, calling the blue-chip benchmark at 7,448 to 7,452 only an hour before Thursday’s open.


Some big names are in the City schedule for Thursday, with   and both due to release results.


Thursday’s Agenda


Interims:  PLC (), PLC (), (), Burford Capital PLC (LON:BUR), PLC (), PLC (LON::INCH), PLC (), Properties PLC (), Group PLC (), PLC (), PLC (LON: LLOY), Lancashire Holdings PLC (), (), PLC (LON:RDSA, ), RELX (), PLC (), (),  Greencoat Wind UK PLC (), (), PLC ()


Finals: ANGLE PLC (), (), PLC (), (), Sky PLC ()


Trading updates:  (), (), Hogg Robinson Group PLC (LON:HRG), PLC (), (), PLC (), PLC ()


Headlines


Lloyds to repay £300m to customers over mortgage arrears errors – Sky News


Car production falls almost 14% as UK sales dip – BBC News


RBS deal with EU pushes UK closer to selling stake – Financial Times


GSK to cut drug development programmes to focus on ‘winners’ – The Guardian


Government’s air quality plan branded inadequate by city leaders – The Guardian

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