FTSE feels pharmaceuticals side-effects

The London market slipped into the red today as investors booked profits following recent highs.

The London market slipped into the red today as investors booked profits following recent highs.

Drug firms were leading the way down after both AstraZeneca and GlaxoSmithKline reported pipeline setbacks.

Despite earlier gains fuelled by a strong performance from heavyweight oil giant Royal Dutch Shell, the FTSE 100 Index fell below the 6200 barrier to close 29.8 points down at 6184.8.

This followed a stellar performance yesterday when the Footsie closed above the 6200 market for the first time in five and a half years.

Pharmaceutical giant AstraZeneca suffered a torrid session after it abandoned a drug to reduce stroke-related disability after clinical trials failed. Shares in the stock fell almost 8% or 267p to 3262p.

GlaxoSmithKline dipped 60p to 1451p following a delay in the US regulatory filing of cancer vaccine Cervarix and a setback for its diabetes drug Redona.

The disappointments overshadowed strong results for both firms and put them under renewed pressure to improve their weakened drug development pipelines.

Drug firms were followed down by Cadbury Schweppes off 6p to 540p after it said a weak performance in the UK meant revenues growth for the year will come in at the middle of its target range.

British American Tobacco gave up 23p to 1459p as investors reacted with caution to its rising profits amid challenging conditions in its European markets.

On the upside, Shell topped the Footsie risers with a gain of 2.5% after its third-quarter results came in ahead of expectations.

Shell lifted 46p to 1888p after its underlying profits came in well ahead of analysts’ expectations despite disruption to production in the Gulf of Mexico and Nigeria.

Mining stocks were going in opposite directions with Vedanta Resources 20p higher at 1452p, while Kazakhmys fell 10p to 1211p.

Anglo American slipped 56p to 2363p as the City continued to digest the appointment of Cynthia Carroll as chief executive, the first outsider and woman to be given the job.

Elsewhere, shares in Blacks Leisure fell a penny to 442p after it said first half profits came in at just £100,000 (€149,000) compared with £6.9m (€10.3m) a year ago. The outdoor clothing chain was hit by a warm summer and a lack of business during the World Cup.

But the results were overshadowed by speculation that Sports World International was about to pounce after it acquired a 29% stake in the company.

Meanwhile, shares in sterilisation firm Isotron lifted more than 8% following a 10% rise yesterday on the back on a takeover approach.

The board today rejected the £164.1m (€240.4m) takeover offer from rival Synergy Healthcare and said it significantly undervalued the company. Shares were up 61p to 807.5p as investors awaited the next move.

The day’s biggest blue chip risers were Shell up 46p to 1888p, Reuters up 8p to 460.5p, Liberty International up 23p to 1333p and Alliance Boots up 12p to 801p.

The day’s biggest blue chip fallers were AstraZeneca down 267p to 3262p, British Energy down 17.5p to 404.5p, GlaxoSmithKline down 60p to 1451p and Anglo American down 56p to 2363p.

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