AstraZeneca guides FTSE 100 higher; buyout powers Cobham

Shoaib Ur Rehman July 25, 2019

London’s FTSE 100 inched higher on Thursday as AstraZeneca stood out on a day of largely mixed corporate earnings, while mid-cap aerospace firm Cobham surged to a more than three-year high after a buyout offer.

The main stock market index added 0.1pc by 0800 GMT, while the mid-cap FTSE 250 rose 0.2pc.

AstraZeneca jumped nearly 6pc to hit an all-time high after raising its annual product sales forecast, as cancer drugs helped its second-quarter results beat analysts’ estimates.

The drugmaker’s stock offset a 1pc dip in consumer goods giant Unilever as rainy weather hit ice cream sales in Europe and North America, and a 1.6pc fall in spirits company Diageo.

GlaxoSmithKline gained 1.5pc after AstraZeneca’s report, and the pharmaceutical giants together helped the FTSE 100 shrug off steep, post-earnings losses in analytics provider Relx and software provider Sage Group.

Hopes of progress in trade negotiations between the United States and China ahead of meetings in Shanghai next week also supported the broader sentiment, helping boost shares of Asia-focused banks HSBC and Standard Chartered .

“Stocks remain well supported on the twin engines for equities in 2019 – stimulus and trade,” Markets.com analyst Neil Wilson said.

On the mid-cap index, Cobham soared more than 34pc to 165 pence, matching the 165 pence per share offered by US private equity group Advent International.

“It’s the latest sign that more firms are happy to go private and take them out of the glare of public markets,” Wilson said. “It’s also a sign that weakness in sterling continues to make UK companies attractive to foreign buyers.”

However, gains on the FTSE 250 were kept in check by Metro Bank, which plunged more than 17pc to an all-time low after it disclosed that customers had pulled 2 billion pounds out this year following an accounting error and said its founder would stand down as chairman.

Shares of Aston Martin, which shed more than a quarter of their value after the luxury carmaker cut its 2019 volumes forecast in the previous session, fell another 8.3pc, deepening its losses for the year to more than 42pc.

Copyright Reuters, 2019

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