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FTSE retreats as pharma stocks fall

Published 25/08/2016, 10:16
© Reuters. A worker shelters from the rain as he passes the London Stock Exchange in the City of London
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By Kit Rees

LONDON (Reuters) - UK shares fell on Thursday, extending losses from the previous session as healthcare stocks dropped, though CRH (L:CRH) rose after posting results.

The blue-chip FTSE 100 index (FTSE) was down 0.8 percent at 6,781.90 points by 0854 GMT in light volumes, outpacing its European peers.

Healthcare stocks took the most points off the FTSE 100 with Hikma (L:HIK), Shire (L:SHP) and Astrazeneca (L:AZN) falling between 2.9 percent to 4.9 percent.

That mirrored losses on Wall Street after Democratic presidential nominee Hillary Clinton called for a lower price for Mylan NV's (O:MYL) allergy drug EpiPen, which has become four times more expensive in the past decade. [nL1N1B518M]

"(This) ... serves to strike fear into the hearts of healthcare groups and their investors everywhere," Mike van Dulken, head of research at Accendo Markets, said in a note.

"The industry (is) ... treading the fine line between balancing the costs of clinical success (and failure) with the economic laws of supply and demand."

A weak copper price, which remained near a two-month low, weighed on the mining sector (FTNMX1770) which was down 1.9 percent. [MET/L]

Glencore (L:GLEN) fell 4.4 percent, extending losses from the previous session when it posted a drop in first half earnings.

Among the top risers, construction firm CRH (L:CRH) gained 2.7 percent after well-received results, hiking its dividend for the first time in seven years. [nL8N1B61SN]

Advertising group WPP (L:WPP) extended its rally from the previous session, up 1.7 percent after a spate of broker price target upgrades on the stock following results on Wednesday.

"We think WPP should be a core holding for long-term investors," analysts at Barclays (LON:BARC) said in a note.

Outside the blue-chips, gambling technology company Playtech (L:PTEC) hit a record high earlier in the session, rising 3.9 percent. It announced a special dividend after reporting an 18 percent jump in first-half revenue. [nL3N1B62BP]

© Reuters. A worker shelters from the rain as he passes the London Stock Exchange in the City of London

Greg Johnson, analyst at Shore Capital Markets, said in a note, adding that the stock was very cheap for the strong revenue growth it delivered.

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