Market Report: AstraZeneca's good news eclipsed by fears over Hillary Clinton's drug price caps

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Execs at AstraZeneca could be forgiven for feeling a bit deflated.

They managed to sell a rare-disease drug which is not part of the pharma firm’s future plans for $165 million (£108 million) to Sanofi, which might have to cough up another $135 million further down the line.

A slimming-down of its portfolio ought to have been cheered by the market but shares dropped 50.5p to 4150.5p.

Investors are still wary about Hillary Clinton’s plans to cap drug prices in the US to prevent so-called “price-gouging”, should she become president.

Yesterday’s profit warning from BTG, down another 17p at 584p, caused by off-colour sales of its varicose vein treatment in the US, didn’t help.

Shire, still hoping to snap up America’s Baxalta, fell 65p to 4420p, and recent Footsie entrant Hikma Pharmaceuticals slipped 74p to 2186p.

A gold rush for mining stocks drove the FTSE 100 up 54.84 points to 6381 — its highest for more than six weeks — thanks to support from Morgan Stanley, which urged clients to start buying into the battered sector.

Anglo American got top billing on the Footsie, up 63.58p to 667.78p, Rio Tinto jumped 172p to 486p, BHP Billiton soared 44.5p to 1104p, and Glencore climbed 3.55p to 121.4p.

Morgan Stanley’s brighter outlook on China — it sees stability on the horizon — lifted other Asia-focused stocks: Standard Chartered rose 32p to 746.1p and Aberdeen Asset Management gained 13.8p at 341p.

JPMorgan cut its rating on Marks & Spencer to neutral, which triggered a 14.5p fall to 504.5p.


Downgrade: M&S

The broker said: “We expect another quarter of negative like-for-like performance from M&S in general merchandise and are also concerned that like-for-like growth in the food business is becoming harder to achieve.”

A continued rise in oil prices — Brent crude futures picked up 84 cents to $52.76 a barrel — boosted Shell, up 50p to 1816.5p, and BP, 11.55p firmer at 389.65p. 

Airline stocks moved in the other direction on the prospect of pricier fuel, with British Airways owner IAG down 28.5p to 558p, with a sector downgrade from Credit Suisse exacerbating falls.

AIM-listed Gemfields lost some sparkle, down 4.06p to 55.44p after full-year profits slipped to $12.3 million (£8 million) from $16.3 million the year before.

Investec insisted the coloured gemstone firm, which saw revenues rise to $171.4 million — is “more about growth”.

The resignation of the finance director hit Ten Alps, 0.22p worse off at 2.78p. It comes a week after the TV production company, co-founded by Bob Geldof, revealed a fall in annual sales as it remained in the red.

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October 7, 2015 |
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