FTSE boosted, with pharmaceutical stocks in demand
Reuters
Published Dec 02, 2015 17:25
FTSE boosted, with pharmaceutical stocks in demand
By Alistair Smout and Kit Rees
LONDON (Reuters) - The FTSE rose on Wednesday as drugmakers gained on recommendations by bullish brokers, while software company Sage (L:SGE) clawed back losses prompted by its reporting results.
Britain's FTSE 100 was up 0.4 percent at 6,423.41 points at its close, with pharmaceutical stocks contributing the most to gains.
GlaxoSmithKline (L:GSK), AstraZeneca (L:AZN) and Shire (L:SHP) combined to add more than 10 points to the index, with the sector lifted by a note from Morgan Stanley (N:MS). AstraZeneca benefited from a double upgrade to "overweight" and GlaxoSmithKline saw its target price lifted.
"AstraZeneca ... has underperformed dramatically over the past year, but looks set to reap the rewards of heavy investment at an attractive valuation," Morgan Stanley said in the note.
Sage led declines earlier in the trading session, yet recovered to trade up 0.1 percent. The software company said it had achieved its target of growing revenue by 6 percent in the 12 months ended September and that it would equal or better the performance in its new financial year.
While the company's underlying performance was strong, brokers said, currency swings and an accounting change had muddied the picture.
"Our initial take is that Sage's underlying performance is possibly a touch ahead of expectations, albeit currency headwinds mean that the overall numbers are in-line," analysts at Numis said in a note, cutting their rating to "hold" from "buy".
"However, this is all slightly muddied by an accounting policy change which we expect to cause some early sell-side confusion this morning."
Among fallers, shares in engineering firm Meggitt (L:MGGT) fell 3.1 percent, with analysts citing the possible impact of a reshuffle of the FTSE 100 index, expected later on Wednesday.
Mining companies Anglo American (L:AAL), Rio Tinto (L:RIO) and Glencore (L:GLEN) were at the bottom of the index, down between 1 percent to 2.2 percent following a decline in copper prices on a stronger dollar and worries over demand in China.
Among mid-caps, Greene King Plc (L:GNK) gained over 13 percent. It posted a rise in profit in its first set of interim results since taking over smaller rival Spirit Pub, as more customers flocked to its pubs.
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Among FTSE 250 (FTMC) fallers, price comparison site Moneysupermarket (L:MONY) fell 4.4 percent after its founder sold a stake in the company.
Saga Plc (L:SAGAG) also suffered from a stake sale. Acromas Bid Co Ltd, the travel and insurance firm's largest shareholder, sold a 13 percent stake through a discounted placing. The shares fell 4.7 percent.
Written By: Reuters
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