FTSE closes up just 3.3 points

Drugs giants GlaxoSmithKline and AstraZeneca weighed on the London market today in an otherwise subdued start to the week in the City.

Shares in both groups dipped ahead of results in the coming days and renewed concern about increased competition from generic firms.

Glaxo fell 24p to £13.34, while its rival dipped 22p to £23.54, and the falls were one of the few talking points in a dreary session.

The FTSE 100 Index closed up just 3.3 points at 4133.8 as investors moved to the sidelines after last week’s buying frenzy.

Analysts said a bout of profit taking could be on the cards but added the Footsie seemed to be settling down above the 4000 barrier.

Tom Hougaard of City Index said: “The reason we are so quiet is that we are consolidating at the higher end of the trading range.”

US markets also provided little impetus to London stocks with the Dow Jones Industrial Average marginally ahead in early trading.

But President George W Bush’s proposals to limit the ability of drugmakers to protect patents on treatments hit Glaxo and AstraZeneca.

Both have been hurt recently by the spectre of increased competition to key drugs from cheaper generic firms.

ITV broadcaster Granada was another faller, down 5% or 3.75p at 71.25p, after weekend reports of calls for its merger with Carlton to be blocked.

Carlton, now a FTSE 250 stock, also dropped by 5%, ending the day down 6.5p at 122p – its lowest price for almost a month.

Banks helped keep the FTSE 100 in positive territory with Lloyds TSB up 9.5p at 574.5p, HSBC up 3p at 720p and Barclays up 2.75p at 459.75p.

But Cable & Wireless was the biggest riser in the top flight after reports it may be in the process of reversing its overseas expansion.

The group closed up almost 6%, or 7.5p at 139p, while BT climbed 5.5p at 187p and software firm Sage rose 2.75p to 140p.

Sage – the only tech stock left in the Footsie – reassured investors it remained on course to hit full-year profits forecasts.

Fund manager Man also rose, up 44p to 990p, after buying Old Mutual’s derivatives business for £100 million.

Among smaller stocks, vaccine firm PowderJect Pharmaceuticals saw its value soar nearly 64% on news it had received takeover approaches.

Hopes of a deal, with some sources claiming US rival Chiron was a suitor, meant the shares added 162.5p to 417.5p.

Another riser was MyTravel, although the 4% gain – 0.75p to 18.75p – reversed only a fraction of its recent heavy losses.

Speculation grew over the weekend that the crisis-hit holiday operator was seeking a “friendly” takeover by a venture-capital firm.

But pubs group SFI slumped 51.5p to 26p after a depressing trading update which saw it cut dividends and warn profits would not meet forecasts.

In the FTSE 100, the biggest risers were Cable & Wireless, up 7.5p at 139p, Royal & Sun Alliance, up 5.5p at 121p, Man, up 44p at 990p and Dixons, ahead 8p at 190p.

The heaviest fallers were Granada, down 3.75p at 71.25p, Schroders, off 18.5p at 530p, Hanson, down 9.75p at 305.25p and Alliance UniChem, down 14p at 500p.