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Results, downgrades keep Britain's FTSE under pressure
May 11, 2017 / 9:42 AM / 7 months ago

Results, downgrades keep Britain's FTSE under pressure

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* FTSE 100 flat

* Hikma drops after drug setback

* BT falls after results, Centrica downgraded

* Ex-divs also weigh

* Rise in miners lends support

By Kit Rees

LONDON, May 11 (Reuters) - Britain’s top-share index slipped from a one-month high on Thursday as disappointing results and downgrades weighed on stocks, as well as a slump in Hikma’s shares after a setback to one of its drugs.

The blue chip FTSE 100 index was flat in percentage terms at 7,384.73 points by 0918 GMT, having risen for 5 straight sessions, while the mid caps fell 0.3 percent.

Pharma firm Hikma sunk 8 percent and hit its lowest level in around 5 months after U.S. regulators decided not to approve its generic copy of GlaxoSmithKline’s blockbuster lung drug Advair.

Hikma also said that the likelihood of an approval this year was now low.

Shares in Hikma’s mid-cap partner Vectura plunged more than 9 percent, while GlaxoSmithKline was 0.6 percent lower as it traded ex-dividend.

Results also weighed, with BT falling 3.2 percent after reporting fourth quarter results.

The telecoms group said it would cut 4,000 jobs in its Global Services unit and scale back its dividend growth ambitions in a bid to recover from an accounting scandal and a profit warning.

“Given the challenges that BT is facing at the moment, including lots of competition, the regulatory issues, and the debt that it took on to fund the purchase of EE, and the pension scheme revaluation coming around this year, it’s probably in the business’ longer-term interests to be prudent,” Laith Khalaf, senior market analyst at Hargreaves Lansdown, said.

Likewise South Africa-exposed paper and packaging firm Mondi dropped 3.1 percent after its first-quarter profit fell due to lower selling prices and inflationary cost pressures.

Energy supplier Centrica was another sizeable faller, down 5.6 percent after J.P. Morgan cut its rating on the stock to “underweight” from “overweight”.

J.P. Morgan analysts pointed to concerns around the impact of regulation of Centrica’s ‘Standard Variable Tariff’ customer base, and around the potential emergence of a price war.

Adding to the pressure, Centrica’s shares also went ex-dividend on Thursday, and it was joined by Admiral Group and Sainsbury which also traded without entitlement to their latest dividend payment.

A rally among mining stocks provided some relief to the losses, though, with precious metals miner Fresnillo, copper miner Antofagasta and Anglo American among the top gainers, all up between 1.9 percent to 3.4 percent as the underlying prices of gold and copper rose.

Editing by Ed Osmond

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