Pharmaceutical sector rescues FTSE
London’s leading shares shrugged off fears over North Korea’s nuclear test today as rising oil prices and pharmaceutical firms took centre stage.
The FTSE 100 Index moved 29.7 points higher to 6030.9, even though the Kospi closed almost 3% lower in South Korea and there were heavy losses in Hong Kong.
Pharmaceuticals firm Shire led the charge in the City after it gained conditional approval from US regulators to market its new hyperactivity drug NRP104. It sent shares in the company nearly 15% higher, up 131p to 1008p.
Rival GlaxoSmithKline was also on the up after announcing the $566m (€449m) acquisition of US-based CNS, which makes nasal strips and dietary supplements. Shares lifted 9p to 1454p.
The market also received a hefty boost from the heavyweight oil stocks BP and Royal Dutch Shell as the price of crude surged back above $60 a barrel.
It came amid rumours OPEC was poised to cut production as crude prices tumbled and stockpiles built up. BP lifted 6p to 578.5p and Shell was 14p stronger at 1781p.
However, the rising oil price added to woes at British Airways where two officials resigned after it emerged the airline had breached its own rules by talking to a competitor about fuel surcharges. Shares were down 8p to 430.25p.
Meanwhile, Corus was still benefiting as prospects loomed large of a takeover from Indian rival Tata Steel, which last week said it was considering making an offer.
Weekend newspaper reports suggested Tata had put together a £3.5bn (€5.18bn) package to help finance the deal. The stock warmed 13p to 494p today.
Severn Trent was on the slide after the demerger of its waste management group Biffa. Shares in Severn Trent fell more than 3% or 51.95p to 1482p after Merrill Lynch cut its rating to neutral from buy. Biffa finished the day flat at 260p.
Online gaming firms were back in the spotlight after last week’s crash in the wake of anti-gambling legislation in the United States.
Party Poker firm PartyGaming started well but shares later dropped 2.5p to 39p as investors continued to worry about its prospects without its US operations.
The company was dealt a further blow when FTSE confirmed it will drop out of the top flight on Wednesday after losing so much of its value last week.
The demotion of PartyGaming will push smaller rival 888 Holdings out of the FTSE 250 Index, although its shares were up 2p to 107p today.
PartyGaming will be replaced in the top flight by Experian, which made a solid start to conditional dealing today with a rise of 16p to 576p following its demerger from GUS.
The day’s top risers were Shire up 131p to 1008p, Lonmin up 122p to 2602p, Kazakhmys up 51p to 1139p and Vedanta up 54p at 1265p.
The day’s biggest losers were PartyGaming down 2.5p to 39p, Severn Trent down 51.95p to 1482p, ITV down 2.25p to 100.25p and British Airways down 8p at 430.25p.
