– FTSE closes up 14.47 at 6,700.19
– AstraZeneca drives index higher
– US imposes sanctions on Russia
– China’s Politburo signals no new large-scale easing ahead
techMARK 2,770.82 +0.83%
FTSE 100 6,700.16 +0.22%
FTSE 250 15,826.24 -0.39%
UK stocks closed modestly higher today, driven by AstraZeneca and further helped by gains in the US this afternoon, while even new sanctions on Russia failed to dampen spirits significantly.
As well, on Friday Chinas Politburo signalled an additional large-scale easing of monetary policy was not likely.
The FTSE 100 ended the session 14.47 points higher at 6,700.16 – notably, albeit marginally, above the psychologically important level of 6,700.
Brenda Kelly, Chief Market Strategist at IG, said: “The US open has given the FTSE the resolve needed to cling on to its gains, after it looked rather weak around lunchtime.
“On a day of little economic data the M&A news in the pharma sector, with Pfizer actively bidding for AstraZeneca, has been a primary driver, although I question how long it can be used as an excuse for increasing exposure to equity markets.”
It was revealed today that house prices in the UK increased by 0.6% in April, according to figures from Hometrack, with buyers now paying the highest average percentage of asking prices in 12 years.
The increase, registered by the housing specialists Monthly National Housing Survey, was unchanged over the previous month.
In other UK macro news, the Confederation of British Industry (CBI) said the economic outlook for the coming three months was “exceptionally strong”, based on a survey of 675 firms which showed the higher level of growth expectation since 2003 when the CBI began collecting the data.
Elsewhere, the Financial Conduct Authority (FCA) has fined Invesco Perpetual, the UK’s biggest retail investment manager, 18.6m after it was found to have exposed its investors to a level of unnecessary risk.
New sanctions imposed on Russia
The White House today announced that the Department of the Treasury is imposing sanctions on seven officials of the Russian government and 17 companies linked to President Vladimir Putin’s inner circle.
Those individuals will be subjected to a visa ban and asset freeze, while the corporations included on the list will be undergo an asset freeze.
Included on the list are Dmitry Kozak, the Deputy Prime Minister of the Russian Federation, and Oleg Evgenyevich, the Russian Presidential Envoy to the Crimean District and a member of the Russian Security Council.
For its part, Capital Economics said it believes the crisis in Eastern Europe will “probably not” escalate significantly, “even though the risks of miscalculation are high”. Nor, it said, would an escalation likely derail the recovery in Western Europe.
AstraZeneca soars on Pfizer bid interest
AstraZeneca was the day’s stand-out performer, up by more than 15 per cent this afternoon after US pharma giant Pfizer confirmed that it had made a ‘preliminary, non-binding indication of interest’ regarding a possible merger in January. The 60bn proposal was rejected by AstraZenecas board, but Pfizer said it is considering its next move.
After Pfizers initial proposal was rejected and Astra declined to engage in further talks this month, the US group said it is currently considering its options. Pfizer said that any potential transaction would offer AstraZenecas shareholders a highly compelling opportunity to realise a significant premium to the recent share price and would include a substantial cash payment.
Other companies in the pharmaceutical sector were also performing well today as a result, including Shire and GlaxoSmithKline.
William Hill was another strong riser, aided by comments from Beaufort Securities, which reiterated its ‘buy’ rating on the betting firm following Friday’s trading update. The gains also come ahead of a review due out Wednesday on fixed-odds betting terminals, which are expected to be softer than previously anticipated.
On the second tier, Al Noor Hospitals, which operates medical facilities in Abu Dhabi, jumped after it said it traded in line with expectations in the first quarter with revenues rising by a quarter. Revenues totalled $ 111.6m in the three months to March 31st, up 24.7% on the year before. During the period, three new medical centres were commissioned.
Back on the top 100, cyclical stocks such as miners and banks were dragging, with Rio Tinto and Royal Bank of Scotland both notable fallers.
Gas giant BG Group delivered a double blow to investors on Monday as it announced the departure of Chief Executive Chris Finlayson, warned its 2014 production levels would be at the lower end of expectations – due to challenges in Egypt.
“Departing BG chief executive Chris Finlayson will have been comforted this morning by the sharp drop in the share price, but as the day has gone on the buyers have come back in, assiduously closing the gap seen at the beginning of trading. Once the headline news has cleared, the rest of BGs update will offer little comfort; the new boss will have to get a firm grip if he is to reverse the declining trend in production that has hobbled the share price all year,” IG’s Brend Kelly said.
Meanwhile, there was talk surrounding insurance company Saga. It will reportedly raise 430m in an effort to reduce its debt pile. If it went ahead, the flotation is expected to value the company at 3bn, reports were claiming.
On its website, the group stated: “We must stress there is no guarantee as to whether or when a public flotation will take place. However, if such a flotation does happen, we will contact all those who have registered an interest to provide them with information on the Saga share offer and how to participate.”
FTSE 100 – Risers
AstraZeneca (AZN) 4,666.50p +14.38%
Sainsbury (J) (SBRY) 330.50p +2.61%
William Hill (WMH) 348.10p +2.38%
Shire Plc (SHP) 3,286.00p +2.37%
SABMiller (SAB) 3,188.00p +1.82%
Fresnillo (FRES) 864.50p +1.71%
Weir Group (WEIR) 2,700.00p +1.43%
Tullow Oil (TLW) 850.50p +1.31%
Morrison (Wm) Supermarkets (MRW) 198.80p +1.22%
Pearson (PSON) 1,103.00p +1.19%
FTSE 100 – Fallers
ARM Holdings (ARM) 915.00p -3.23%
Rio Tinto (RIO) 3,185.50p -2.84%
Royal Bank of Scotland Group (RBS) 295.50p -2.54%
Travis Perkins (TPK) 1,744.00p -2.46%
Reckitt Benckiser Group (RB.) 4,845.00p -2.28%
St James’s Place (STJ) 763.50p -1.99%
easyJet (EZJ) 1,628.00p -1.99%
WPP (WPP) 1,235.00p -1.98%
Capita (CPI) 1,062.00p -1.85%
Barratt Developments (BDEV) 353.80p -1.78%
FTSE 250 – Risers
Ladbrokes (LAD) 145.10p +4.61%
AL Noor Hospitals Group (ANH) 1,029.00p +4.20%
Tullett Prebon (TLPR) 313.40p +3.91%
EnQuest (ENQ) 135.30p +3.20%
Cairn Energy (CNE) 175.90p +2.93%
esure Group (ESUR) 258.00p +2.38%
Rank Group (RNK) 161.70p +2.34%
ICAP (IAP) 424.10p +2.09%
Worldwide Healthcare Trust (WWH) 1,251.00p +1.96%
Ashmore Group (ASHM) 358.50p +1.90%
FTSE 250 – Fallers
Pace (PIC) 370.10p -7.45%
Supergroup (SGP) 1,397.00p -4.58%
Ocado Group (OCDO) 317.20p -4.31%
Foxtons Group (FOXT) 320.20p -4.30%
Paragon Group Of Companies (PAG) 367.50p -3.42%
Perform Group (PER) 220.70p -3.20%
Fidessa Group (FDSA) 2,379.00p -3.17%
Elementis (ELM) 282.70p -2.82%
Euromoney Institutional Investor (ERM) 1,090.00p -2.68%
NMC Health (NMC) 452.00p -2.63%