London close: FTSE closes in positive territory, pharma stocks lead

LONDON (ShareCast) – – FTSE closes up 56.51 points at 6,681.76
– Easter weekend retail sales disappoint
– Monthly US existing home sales down 0.4 per cent

techMARK 2,738.48 +2.18%
FTSE 100 6,681.76 +0.85%
FTSE 250 16,082.24 +1.10%

The FTSE 100 closed on an upbeat note today, having touched 6,700 earlier in the session as gains in the pharmaceutical sector drove sentiment higher on the back of a mix of major deals and M&A speculation.

The top tier index closed up 56.51 points at 6,681.76, after having been shut since Thursday following the long Bank Holiday weekend.

IG (LSE: IGG.L – news) ‘s Chief Market Strategist, Brenda Kelly, said: “The UK market has come back to the fray in fine form today, rising on the back of merger and acquisition activity as it strains to put the volatility of April behind it. However, those with a longer-term view will be carefully eyeing the top end of the current trading range.

“Since mid-March we have bounced between 6500 and 6700 without establishing any real direction. The activity in the pharma sector is perhaps the first real sign of activity for a number of weeks, but even now 6700 is proving to be quite the hurdle.”

Indeed, it is certainly not all good news, with UK retail numbers for the long weekend coming in notably worse than even 2013’s cold and wet Easter, with analysts blaming the still-fragile nature of consumer confidence. Retail footfall was below 2013 figures across all destinations, with average footfall on Good Friday down 7.6%, and 8.7% on Easter Saturday, according to data from retail data company Springboard.

“People are clearly still very nervous about spending and these figures reveal the fragility of the recovery,” said Springboard’s Marketing and Insights Director, Diane Wehrle.

However, although High Street shops were competing with one of the coldest and wettest Easter weekends ever recorded in the country in 2013, numbers still fell 8.4% and 10.7% across the two days.

Over in the States the news was a bit more positive, with existing home sales down 0.4% month-on-month in March, to an annualised pace of 4.59m, dropping from the 4.6m clip observed in the month before, according to the National Association of Realtors (NAR). The consensus estimate had been for a print of 4.55m.

The lobby group pointed to rising prices and severe winter weather as the main causes behind the slip.

Reflecting on the broadly positive corporate earnings reports coming out from the US, Kelly predicted that we are now “only another modestly positive session away from seeing 16,600 once again on the Dow Jones”, which she believes is “an indication perhaps that this remains a market that wants to go up”.

Broker comment drives Shire (LSE: SHP.L – news) into the top spot

Jefferies gave Shire a boost after it raised its target price for the pharmaceuticals group from 3,400p to 3,550p and kept a ‘buy’ rating, saying that the recent share-price weakness has presented an “attractive buying opportunity”. The broker trimmed its estimates due to “sluggish” first-quarter ADHD prescriptions trends in the States, but still believes that group earnings will growth at a “robust” 13% rate over 2013-2018.

GlaxoSmithKline (Other OTC: GLAXF – news) (GSK) also jumped after announcing a massive three-part deal with Swiss pharmaceuticals peer Novartis (Xetra: NOT.DE – news) , which will see shareholders receive a £4bn capital return. Killik maintained a ‘buy’ recommendation on GSK, saying that the deal will accelerate growth, provide cost savings and generate increased returns.

AstraZeneca (NYSE: AZN – news) was rising strongly on speculation that Pfizer (NYSE: PFE – news) could make a takeover approach for the company, in a transaction valued in the region of £60bn, representing the biggest deal ever in the industry’s history and the largest foreign takeover of a UK business on record.

While AstraZeneca reportedly rejected the informal offer, Analyst Andrew Baum from Citigroup (NYSE: C – news) said he expected Pfizer to “push aggressively ahead with a second approach”.

US companies Eli Lilly and Allergan (NYSE: AGN – news) were also making headlines on the back of M&A speculation today.

Meanwhile, Babcock fell despite an upgrade from ‘hold’ to ‘buy’ from Investec (LSE: INVP.L – news) .

Randgold, Fresnillo (Other OTC: FNLPF – news) , Rio Tinto (Xetra: 855018 – news) and Anglo American (LSE: AAL.L – news) were all firmly in the red, hit by concerns about the Chinese economy, which suffered a slowdown in first quarter growth.

On the second tier index, telecoms provider Colt fell sharply after it said margin pressures chipped away at quarterly earnings as it warned full-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) before restructuring charges are expected to range between 5% and 10% below current consensus estimates.

FTSE 100 – Risers
Shire Plc (SHP) 3,146.00p +7.56%
GlaxoSmithKline (Frankfurt: GS7.F – news) (GSK) 1,640.00p +5.20%
AstraZeneca (EUREX: AZNF.EX – news) (AZN) 3,960.00p +4.72%
Sports Direct International (Other OTC: SDISY – news) (SPD) 830.00p +3.88%
Hargreaves Lansdown (LSE: HL.L – news) (HL.) 1,247.00p +3.66%
William Hill (Other OTC: WIMHF – news) (WMH) 332.40p +3.20%
Royal Mail (Other OTC: ROYMF – news) (RMG (Brussels: ROU.BR – news) ) 522.00p +2.55%
Persimmon (PSN) 1,325.00p +2.55%
Weir Group (Frankfurt: 42W.F – news) (WEIR) 2,627.00p +2.50%
Experian (EUREX: EXPF.EX – news) (EXPN) 1,107.00p +2.41%

FTSE 100 – Fallers
Randgold Resources Ltd. (RRS) 4,605.00p -2.40%
Fresnillo (Berlin: FNL.BE – news) (FRES) 848.00p -2.30%
Babcock International Group (BAB (Other OTC: BABB – news) ) 1,191.00p -2.06%
Standard Chartered (HKSE: 2888.HK – news) (STAN) 1,311.50p -1.06%
Rio Tinto (RIO) 3,257.00p -0.96%
Ashtead Group (LSE: AHT.L – news) (AHT) 900.50p -0.77%
Anglo American (AAL) 1,538.50p -0.55%
HSBC Holdings (HKSE: 0005.HK – news) (HSBA) 614.90p -0.40%
Unilever (Amsterdam: UNIA.AS – news) (ULVR) 2,609.00p -0.31%
Tullow Oil (LSE: TLW.L – news) (TLW) 865.00p -0.29%

FTSE 250 – Risers
Ocado Group (Other OTC: OCDGF – news) (OCDO) 374.00p +6.80%
Worldwide Healthcare Trust (WWH) 1,288.00p +6.01%
Xaar (XAR) 900.00p +5.14%
Hikma Pharmaceuticals (LSE: HIK.L – news) (HIK) 1,570.00p +4.95%
Moneysupermarket.com Group (MONY) 186.60p +4.89%
JD Sports Fashion (LSE: JD.L – news) (JD.) 1,817.00p +4.73%
Intermediate Capital Group (ICP) 450.80p +4.40%
Evraz (LSE: EVR.L – news) (EVR) 94.90p +4.17%
BTG (LSE: BTG.L – news) (BTG (Other OTC: BTGGF – news) ) 551.50p +4.15%
Heritage Oil (Other OTC: HGOCF – news) (HOIL) 266.90p +4.01%

FTSE 250 – Fallers
COLT Group SA (COLT) 130.00p -10.16%
African Barrick Gold (LSE: ABG.L – news) (ABG) 250.20p -3.44%
QinetiQ Group (Other OTC: QNTQF – news) (QQ.) 217.50p -1.85%
Centamin (DI (KSE: 003160.KS – news) ) (CEY) 52.90p -1.58%
EnQuest (Frankfurt: 3EQ.F – news) (ENQ) 126.60p -1.56%
PayPoint (PAY) 1,163.00p -1.44%
Spirent Communications (Other OTC: SPMYY – news) (SPT (Taiwan OTC: 8431.TWO – news) ) 96.60p -1.43%
Domino’s Pizza Group (DOM) 516.00p -1.34%
Merlin Entertainments (Other OTC: MIINY – news) (MERL) 352.20p -1.15%
Britvic (Munich: B6S.MU – news) (BVIC) 739.00p -1.07%

NR

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