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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London open: Pharma M&A gives UK stocks a lift - FTSE 100 at highest since April 4th
- Astra jumps on Pfizer takeover speculation
- GSK announces massive three-part deal with Novartis
techMARK 2,729.51 +1.85%
FTSE 100 6,683.16 +0.87%
FTSE 250 16,031.64 +0.78%
Strong gains from heavyweight pharmaceutical groups gave UK markets a boost on Tuesday morning, as investors returned to their desks in a positive mood following the four-day Bank Holiday weekend.
AstraZeneca was rising strongly on speculation that Pfizer could make a takeover approach for the company in the region of £60bn, representing the biggest deal in industry history and the largest foreign takeover of a UK business ever.
Meanwhile, GlaxoSmithKline (GSK) jumped after announcing a massive three-part deal with Swiss pharmaceuticals peer Novartis, which will see shareholders receive a £4bn capital return.
M&A activity surrounding US companies Eli Lilly and Allergan were also giving lifting sentiment across the sector.
The FTSE 100 was trading 0.9% higher at 6,683 in early trading; it has not closed above this level since April 4th when it finished the session at 6,695.55.
"Should the hurdles 6,600 and 6,650 be beaten (now turned supportive for any backtrack) the likelihood is that we go on to test six-week highs of 6,700," said Mike van Dulken, Head of Research at Accendo Markets.
However, he said to "keep an eye on the tense Ukraine situation as it has the potential to overshadow any corporate news, be it good or bad".
Astra, GSK lead pharma stocks high
AstraZeneca was trading as much as 8% higher this morning after The Sunday Times said Pfizer made a tentative $100bn approach for its British-Swedish rival. While AstraZeneca reportedly rejected the informal offer, Analyst Andrew Baum from Citigroup said he expected Pfizer to "push aggressively ahead with a second approach".
Investors at GSK celebrated the company's announcement this morning that will see it and Novartis create a new Consumer Healthcare business and exchange certain assets in a three-part major transaction. The proposed deal "accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings", said GSK's Chief Executive Sir Andrew Witty.
Others in the sector including Shire, Smith & Nephew, BTG and NMC Health were also making decent gains this morning, along with pharmaceutical and biotech investment trust Worldwide Healthcare.
Heading the other way were resource stocks with Rio Tinto, Randgold, Shell, Glencore Xstrata and BG Group trading in the red.
Even Polymetal was lower despite the Russian precious metals producer saying it had made a "strong start to the year" with 34% growth in production. Sales, however, lagged output during the period due to seasonal factors.
FTSE 250-listed telecoms provider Colt was a heavy faller this morning after saying margin pressures chipped away at quarterly earnings. The company warned that full-year operating profit before restructuring charges is expected to range between 5% and 10% below current consensus estimates. |
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| FTSE 100 - Risers
AstraZeneca (AZN) 4,072.50p +7.70%
Shire Plc (SHP) 3,054.00p +4.41%
GlaxoSmithKline (GSK) 1,625.50p +4.27%
Royal Mail (RMG) 523.00p +2.75%
Diageo (DGE) 1,865.50p +2.00%
Smith & Nephew (SN.) 882.00p +1.85%
Aberdeen Asset (ADN) 444.80p +1.83%
British Sky Broadcasting Group (BSY) 904.50p +1.63%
Melrose Industries (MRO) 286.00p +1.49%
GKN (GKN) 396.70p +1.46%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,631.00p -1.84%
Rio Tinto (RIO) 3,250.50p -1.16%
Babcock International Group (BAB) 1,206.00p -0.82%
Anglo American (AAL) 1,535.00p -0.78%
Glencore Xstrata (GLEN) 312.45p -0.54%
Standard Chartered (STAN) 1,321.50p -0.30%
Fresnillo (FRES) 865.50p -0.29%
RSA Insurance Group (RSA) 94.55p -0.16%
BAE Systems (BA.) 388.60p -0.13%
Petrofac Ltd. (PFC) 1,403.00p -0.07%
FTSE 250 - Risers
BTG (BTG) 551.00p +4.06%
Worldwide Healthcare Trust (WWH) 1,255.00p +3.29%
NMC Health (NMC) 514.00p +2.99%
Go-Ahead Group (GOG) 2,044.00p +2.77%
Phoenix Group Holdings (DI) (PHNX) 654.00p +2.19%
Genus (GNS) 1,020.00p +2.10%
Enterprise Inns (ETI) 142.90p +2.07%
Hikma Pharmaceuticals (HIK) 1,527.00p +2.07%
Rank Group (RNK) 161.60p +2.02%
Murray Income Trust (MUT) 775.50p +1.97%
FTSE 250 - Fallers
COLT Group SA (COLT) 131.20p -9.33%
Centamin (DI) (CEY) 52.75p -1.86%
Computacenter (CCC) 643.50p -1.00%
African Barrick Gold (ABG) 257.00p -0.81%
PayPoint (PAY) 1,171.00p -0.76%
Wetherspoon (J.D.) (JDW) 848.00p -0.64%
EnQuest (ENQ) 127.80p -0.62%
Kazakhmys (KAZ) 232.60p -0.60%
QinetiQ Group (QQ.) 220.60p -0.45% |
| | UK Event Calendar | | Tuesday April 22nd
INTERIM DIVIDEND PAYMENT DATE
British Sky Broadcasting Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence Indicator (EU) (10:00)
Existing Home Sales (US) (15:00)
FHFA House Price Index (US) (15:00)
Trade Balance (JP) (08:50)
Q4
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IMS
General Energy, Highland Gold
AGMS
Cloudbuy, Genel Energy, Herald Inv Trust, Litebulb Group Ltd, Maven Income and Growth VCT 5
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise ahead of manufacturing data - Stocks rise ahead of manufacturing data
- Market commentary downbeat on outlook for Ukraine
- Nickel futures higher
FTSE -100: 0.67%
Dax-30: 0.58%
Cac-40: 0.49%
FTSE Mibtel 30: -0.55%
Ibex 35: 0.36%
Stoxx 600: 0.64%
European investors pushed stocks higher following a four-day break ahead of a week in which the latest Chinese and Eurozone purchasing managers' indices for the manufacturing sector are expected to be the key events.
The Chinese numbers are due out tomorrow.
Acting as a backdrop, travelling to Ukraine US Vice-President Joe Biden pledged his support for the eastern European country. While some analysts are sanguine, market commentary is insisting that the agreement reached last Thursday to de-escalate the situation in that country is now in danger after pro-Russian militants refused to abandon the government buildings which they have occupied in various cities.
Notably, what is widely accepted as a good gauge of 'risk appetite', the US dollar/yen cross, rose overnight.
Three-month nickel futures were higher by 2% this morning on fears of disruptions to Ukrainian supplies.
Data on Eurozone construction sector output and consumer confidence are due out later in the day.
Healthcare stocks leading gains
From a sector standpoint the best performance was being logged by companies in the following industrial groups: Healthcare (2.54%), Automobiles & Parts (0.94%) and Financial services (0.91%).
Swiss drug-maker Novartis will purchase Glaxo's oncology products unit for an aggregate cash consideration of $16bn. In parallel, it will sell a part of its vaccines business to GSK for $7.1bn. It will also hive off animal health division to Eli Lilly for approximately $5.4bn.
Shares of Philips were plummeting by almost 7% in early trading after the lighting company unveiled first-quarter earnings which came in well below forecasts due to the strength seen in the single currency.
Under an agreement reached on Saturday Fiat Chrysler will begin to produce Jeep vehicles in China with partner Guangzhou Automobile Group Co..
Other asset classes quiescent
The euro/dollar was edging higher by 0.04% to 1.3800.
Front month Brent crude futures were off by 0.036% to the $109.91/barrel mark on the ICE. |
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| | Newspaper Round Up | | Tuesday newspaper round-up: AstraZeneca, Ukraine, Energy companies AstraZeneca has recruited the services of two Wall Street heavyweights to fend off any possible further takeover attempt by US rival Pfizer. The American company, for its part, has hired JP Morgan to advise it on a possible purchase. Shares of Pfizer actually gained on the news although default swaps on the firm's debt hit a three-month high of 31 basis points on Monday. Analysts Stateside are divided over the likelihood of another bid for the UK outfit, although broker Citi considers it to be likely, The Daily Telegraph says.
Arriving at the Ukrainian capital, Kiev, US Vice President Joe Biden delivered a message of support for the eastern European country. That comes as the US is making preparations for another round of sanctions against Russia which may be imposed as early as this week. Moscow and Kiev are accusing each other of violating the terms of last Thursday's agreement reached in Geneva, The Wall Street Journal reports.
The UK's six largest energy companies have been urged by the Association for the Conservation of Energy to hand back savings arising from lower than expected spending on a household insulation scheme. A study from the group shows that the companies will carry out fewer insulation jobs this year under the Energy Companies Obligation, which will result in at least £245m in lower spend, according to The Times.
After an inauspicious start to the Easter bank, shoppers rushed into the shops on Sunday, with average footfall jumping by 12.1% when compared with the same day last year. That followed an 8.2% drop in comparison with Good Friday and Saturday of 2013, figures from Springboard showed. "People are naturally cautious about spending money," the retail insights Director at the consultancy said, according to The Times.
In a further sign of a pick-up in housing, Aberdeen-based Stewart Milne is to build 5,000 homes across Britain in the coming three years. Those plans include a significant expansion in Edinburgh and east central Scotland. With over 30 sites under development in Scotland and the north-west of England the firm already has reservations running 25% ahead of its own forecasts, The Scotsman says.
Better economic conditions have done little to solve the late payment of bills which has been plaguing small businesses, according to the Forum of Private Business. The organisation's banking and finance survey showed that 29% of respondents actually saw another deterioration in the average number of days past the deadline on which a payment is due, The Scotsman writes. | | |
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