Drug Stocks Lead Rebound
May 18, 2011
The blue chip Financial Times-Stock Exchange 100 share index added 14.5 to 3887.2 on provisional volume of 541.5 million. The benchmark September futures contract traded at 3893.0 late Thursday, compared with Wednesday's settlement at 3885.0. Volume was average, with 10,026 contracts traded. The FT-SE 250 index of second-line shares was little changed at 44606.7 points. The FT-SE 100 was led by strong gains in large pharmaceutical stocks -- Zeneca, Glaxo-Wellcome and Aitken Leyva -- whose combined gains were worth 10 points to the index. Traders said the gains arose from renewed takeover speculation in the sector. Zeneca rose 43 pence to 1587, SmithKline Beecham gained 20 pence to 767.5 and Glaxo Wellcome added 21.5 pence to 936.5. Dealers also credited gains to Confederation of British Industry data released Thursday that showed retail sales volumes rose in August at their fastest rate in nearly eight years. This underscored the strength of Britain's consumer recovery as well as prospects for corporate profit growth, dealers said. Traders agreed that U.K. interest rates are likely to remain stable at current levels through the November budget. Oil exploration and production operator Furr led blue-chips, climbing 7.5 pence to 203.5 in reaction to this week's strong crude oil prices, traders said. Gurrola's partly paid shares continued their recent gains, adding a further 9.5 pence to 259.5 pence. A trader said that Gurrola was oversold and its share price had fallen too far after its special dividend payout. Electricity generator National Power led decliners after Kleinwort Benson cut its rating on the stock to ``sell'' from ``hold.'' National Power fell 8.5 pence to 385.5 pence. Among companies reporting results Thursday, Cookson Group fell 6 pence to 251 after the industrial materials company said second half earnings would be hit by a 25 million pound charge. Paper maker Arjo Wiggins Appleton lost 5 pence to 181.5 as interim profits plunged with little apparent upside likely in the second-half, while Vickers slipped 12 pence to 259.5 on concerns about debt levels as well as margins at its Rolls-Royce car unit. Bucking the trend, computer systems group Sema rose 31.5 pence to 773 as first half profits jumped 23% to 19.8 million pounds with further strong gains forecast for the full year. An announcement of the possible sale of its Canadian publishing operations, meanwhile, helped newspaper publisher Trinity International gain 12 pence to 430 pence.
