Pharmaceuticals spark FTSE rally

Pharmaceuticals stocks led the FTSE 100 Index forward today after it was reported that AstraZeneca had begun key research into a new lung cancer drug.

The stock lifted nearly 2% and was followed up by rival GlaxoSmithKline as the top flight rallied once again following gains of more than 50 points by the Dow Jones Industrial Average last night.

But the news that heavyweights HSBC, Vodafone and Next had gone ex-dividend stifled serious gains as the Footsie moved forward 5.5 points to stand at 5522.7 by mid-morning.

AstraZeneca shares were up 39p to 2637p today while GlazoSmithKline rose 12p to 1466p.

BT Group was also in buoyant mood after Lehman Brothers raised its recommendation to “overweight” from “equal-weight”. Shares in the company rose 3.25p to 212.75p.

And Dixons group DSG International cheered 1% as traders expressed relief at news there had been no further significant deterioration in trading in the UK. Although the group warned conditions remained difficult, shares lifted 1.75p to 152.25p.

But the mood was less positive for materials technology company Johnson Matthey, which was the heaviest Footsie faller despite saying growth in its precious metals and ceramics businesses contributed to a 3% hike in underlying profits.

Shares fell 2% or 21p to 1268p as traders said there was not enough to drive the stock higher after a recent strong run.

Oil heavyweights BP and Royal Dutch Shell weighed on sentiment as the cost of a barrel of oil hovered below 59 US dollars. BP weakened 3p to 660.5p while its rival lost 6p to stand at 1937p.

And investors banked profits in online poker giant PartyGaming after significant gains yesterday.

Shares in the PartyPoker operator slipped 1.5p to 104.5p.

Mining stocks were also feeling glum after a decline in copper prices overnight. Antofagasta fell 27p to 1657p while rival Xstrata was down 19p at 1351p.