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London midday: Stocks retreat from record high; Astra drops on miss
London stocks edged a little lower by midday on Friday as investors paused for breath following a record closing high a day earlier, led by AstraZeneca after slightly disappointing quarterly numbers.
The FTSE 100 was down 0.2% to 7,775.77, after closing up 0.7% at 7,787.97 the previous session, which was a record close, as energy shares benefited from a jump in oil prices.
Barring a dramatic reversal this afternoon the leading UK stock index will have posted eight consecutive weekly gains, said market analyst David Cheetham at XTB. "The market has this morning fallen just short of its previous intra-day high at 7791 but with the benchmark benefitting from both a softer pound and an improved global risk sentiment then there could well be a Friday rip higher into uncharted territory ahead of a weekend containing two big events for Britain with the royal wedding and FA cup final."
With the pound down 0.2% against the dollar at 1.3493 and 0.1% versus the euro at 1.1446, the blue chip benchmark could yet pop back into the green for a new record.
"Brexit developments are coming back into focus as far as the markets are concerned, with the pound clearly sensitive to recent reports on a future customs union between the UK and EU," Cheetham said.
Prime Minister Theresa May is pushing a new plan for the UK to remain in a customs union with the EU after 2021 until an alternative solution is found to having a hard border in Ireland, which she plans to present to a European Council meeting next month. However Irish counterpart Leo Varadkar warned a new customs plan is likely to be insufficient to avoid a hard border.
In corporate news, AstraZeneca was under the cosh as the pharmaceutical giant's first-quarter sales and earnings came in lower than expected due to investment in new drug launches and erosion of its Crestor statin drug.
Analysts at Jefferies said: "This quarter's relatively low core EPS number reflected a low externalisation and [other operating income] contribution which is volatile on a quarterly basis." They highlighted strong starts for newly launched Tagrisso and Lynparza, both beating expectations by 4% and 7%, respectively, while respiratory drugs missed due to continued pricing pressure and timing of government buying.
Hikma Pharmaceuticals slipped despite hailing an "encouraging start" to the year and reiterating its full-year guidance.
Rio Tinto fell after saying it had been given the green light to run driverless trains at its iron ore business in Western Australia, while homeware retailer Dunelm was in the red as it appointed Laura Carr - currently group financial controller of Compass Group - as its new chief financial officer.
John Laing Infrastructure was a smidgen lower even as it posted 1.8% growth in its underlying portfolio value for the three months to the end of March.
Just Group fell as private equity investor Permira ditched its entire holding in the retirement services company a day after it surged on the back of solid first-quarter sales figures.
Lloyds gave up slight early gains after announcing the sale of its Irish residential mortgage portfolio to Barclays for £4bn.
In small caps, Carpetright rallied after announcing plans for a £60m placing and open offer to fund additional costs associated with implementing its CVA, repay its £12.5m interim loan and fund the group's capex plans.
In broker note action, DS Smith was the standout gainer after it was lifted to 'outperform' at Davy, while Ocado was upgraded to 'hold' at HSBC a day after signing a deal with US grocery chain Kroger.
Smith & Nephew was hit by a downgrade to 'hold' at Commerzbank, but outsourcer Capita was higher after an upgrade to 'overweight' at JPMorgan.
888 was cut to 'neutral' by JPMorgan and Grainger was downgraded to 'equal-weight' at Barclays, while BTG was knocked down to 'hold' at Investec.
Market Movers
FTSE 100 (UKX) 7,775.32 -0.16%
FTSE 250 (MCX) 20,976.23 -0.21%
techMARK (TASX) 3,494.17 -0.72%
FTSE 100 - Risers
Smith (DS) (SMDS) 553.00p 1.77%
Burberry Group (BRBY) 1,955.50p 1.43%
NMC Health (NMC) 3,726.00p 1.42%
CRH (CRH) 2,771.00p 1.35%
Rolls-Royce Holdings (RR.) 850.80p 1.33%
Melrose Industries (MRO) 237.13p 1.12%
Unilever (ULVR) 4,143.50p 1.05%
Relx plc (REL) 1,611.50p 0.91%
St James's Place (STJ) 1,203.50p 0.80%
National Grid (NG.) 869.90p 0.67%
FTSE 100 - Fallers
AstraZeneca (AZN) 5,216.00p -2.41%
Johnson Matthey (JMAT) 3,468.00p -2.12%
Vodafone Group (VOD) 193.00p -1.55%
Glencore (GLEN) 391.80p -1.52%
Royal Mail (RMG) 547.20p -1.41%
Royal Bank of Scotland Group (RBS) 290.66p -1.30%
Marks & Spencer Group (MKS) 293.90p -1.14%
Tesco (TSCO) 244.80p -1.13%
Admiral Group (ADM) 1,923.50p -1.11%
BHP Billiton (BLT) 1,734.40p -0.87%
FTSE 250 - Risers
Capita (CPI) 138.30p 4.93%
Games Workshop Group (GAW) 2,685.00p 3.27%
On The Beach Group (OTB) 513.00p 2.19%
Greggs (GRG) 1,066.00p 1.91%
Diploma (DPLM) 1,249.00p 1.88%
Jupiter Fund Management (JUP) 476.10p 1.64%
Stobart Group Ltd. (STOB) 246.97p 1.63%
Vedanta Resources (VED) 836.40p 1.55%
SSP Group (SSPG) 635.40p 1.31%
Riverstone Energy Limited (RSE) 1,294.50p 1.29%
FTSE 250 - Fallers
Cobham (COB) 117.00p -5.30%
Grainger (GRI) 308.60p -4.16%
Superdry (SDRY) 1,195.00p -3.08%
BTG (BTG) 611.50p -2.86%
Sophos Group (SOPH) 583.84p -2.53%
Thomas Cook Group (TCG) 135.60p -2.52%
TI Fluid Systems (TIFS) 246.00p -2.38%
Rank Group (RNK) 165.80p -2.36%
Polymetal International (POLY) 695.20p -2.08%
Alfa Financial Software Holdings (ALFA) 329.00p -2.08%