Footsie edges higher
GlaxoSmithKline gave investors a dose of good news today as the drugs giant prevented the London market from closing in negative territory.
The heavyweight stock proved to be the star performer of the session, rising 6% after posting strong first quarter figures and announcing a deal with American regulators to restart production of two key treatments.
Glaxo’s gains offset losses among banks and insurers as the FTSE 100 Index surrendered an initial rise of 30 points to close 0.8 points higher at 4790.2.
The disappointing finish reflected weakness in New York, where shares were trading lower after weaker-than-expected GDP figures heightened fears over the state of the world’s biggest economy.
Food companies in London were also facing uncertainty after the World Trade Organisation upheld an earlier ruling that European sugar exporters were getting more in government handouts than is allowed under trade rules.
The blow to the sector left British Sugar owner Associated British Foods 4% lower – off 32p at 728p – while Tate & Lyle was 15.5p cheaper at 453.5p.
Norwich Union owner Aviva led the financial fallers with a decline of more than 2%, off 15p at 577.5p after it disappointed the market with lacklustre growth of 1% in its UK business. A stronger showing in the continent meant it was still able to post a 17% rise in overall sales.
Among other insurers, the Pru slipped 5p to 474p, Royal & Sun Alliance dipped a penny to 75.25p and Legal & General fell 2p to 104p.
Negative momentum was also being felt from mining stocks after March production figures from BHP Billiton disappointed the market. BHP was down 22p at 624p while Antofagasta eased 31p to 1096p.
GlaxoSmithKline led the Footsie risers with an 79p gain to 1320p after broker Numis Securities described the return of the two withdrawn drugs to the market without cash penalties as “reassuring”. It also benefited from first-quarter results showing a 17% rise in profits to £1.71 billion.
Rival AstraZeneca was boosted by news that it too had made an “excellent” start to the year, its stock rising 10p to 2290p.
Allied Domecq was the second highest blue-chip climber – up 3% or 20p at 693p - after it emerged the drinks giant had received a second takeover proposal, this time from a US-based consortium.
Elsewhere, investors in Shell initially gave a positive reaction to its latest quarterly profits rise, although the stock later closed 1.5p lower at 466.5p. BP was half a penny higher at 532.5p.
Outside the top flight, shares in Marconi dived 38% after BT failed to pick the telecoms equipment company for any work in the roll-out of its £10 billion network transformation programme. The stock lost 184p to 298p.
On the high street, Body Shop shares jumped 16% or 26.25p to 191.25p as it impressed with results that one analyst called a “stunningly good performance”.
The biggest Footsie risers were GlaxoSmithKline up 79p at 1320p, Allied Domecq ahead 20p at 693p, Smith & Nephew up 13.5p at 536.5p and National Grid Transco ahead 11.5p at 514.25p.
The biggest fallers were AB Foods down 32p at 728p, SABmiller off 29p at 775p, BHP Billiton down 22p at 624p and Tate & Lyle off 15.5p at 453.5p.
