View the article online at http://citywire.co.uk/money/article/a983484
Trump's pharma attack can't stop FTSE breaking records
FTSE 100 notches up 13th consecutive day of gains, setting new record, despite damage to pharmaceutical stocks after Donald Trump attack.
- FTSE breaks more records
- Trumps sparks pharmaceuticals sell-off
- Tesco and Marks and Spencer results
- Miners rise again after dollar sell-off
Update: The FTSE 100 has continued to break records, notching up its longest-ever winning streak and a new all-time closing high, despite a sell-off in pharmaceutical stocks, which came under fire from US president-elect Donald Trump.
The UK blue-chip index closed just two points higher at 7,292, marking the 13th consecutive day of gains, an all-time record.
But healthcare stocks were in the red, after Trump yesterday claimed pharmaceutical companies were 'getting away with murder' by charging too much.
Shire (SHP) fell towards the bottom of the index, down 3.6% at £45.14 today and 6.3% lower over the last two, after the sell-off took hold in the closing minutes of yesterday's trading.
Pharmaceutical stocks have endured a mediocre 18 months, weighed down by a US election campaign in which Democrat candidate Hillary Clinton pledged to clamp down on 'price gouging' in drug pricing.
But after gaining an initial lift from the shock victory of Trump, seen as more friendly to the sector, their shares have continued to drift, with much of their performance coming from the pound's fall following the Brexit vote, due to their high overseas earnings.
Trump's remarks yesterday have meanwhile prompted investors to reassess the president elect's stance towards the sector.
'If pharmaceutical companies were hoping for an easier ride from president elect Donald Trump than Hillary Clinton they were quickly disabused of this notion last night when the president elect let rip at the industry's pricing policies,' said Michael Hewson, chief market analyst at CMC Markets UK.
'At a time when pharmaceutical companies were hoping for a more benign investment environment last night's remarks were a reminder, if any were needed, as well as a warning to the sector and other sectors as well, of the president elect's propensity to adopt a scattergun approach to domestic policy.'
Tesco can't keep up
Pharmaceutical stocks were joined at the bottom of the index by Tesco (TSCO), down 1.5% at 205.6p despite reporting its best quarter of sales growth for five years.
'There are signs that the giant might be stirring once again, but a slowdown over the Christmas period will leave many investors worrying whether the group can achieve sustained growth,' said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
Miners enjoyed another day at the top of the index, boosted by a falling dollar after Trump failed to provide any details on tax cuts and infrastructure spending in yesterday's briefing.
While the dollar was flat against the pound, it lost 1.5% against the yen to trade at 113.87 yen. A weaker dollar tends to benefit metals as they are priced in the US currency. As a result gold rose to a seven-week high of $1,202.05 an ounce while silver also rallied, helping precious metal miners Fresnillo (FRES) and Randgold Resources (RRS) top the FTSE 100, up 3.5% at £14.30 and 4% higher at £67.95 respectively.
It was the same story on the FTSE 250, which saw mining companies jump to the top. Risers included:
- Hochschild Mining (HOCM) +3.8% at 231.1p;
- Kaz Minerals (KAZ) +4.2% at 431.1p;
- Centamin (CEY) +3.9% at 151.2p;
- Evraz (EVRE) +2.5% at 228.2p;
- Vedanta Resources (VED) +4.7% at £10.02;
- Acacia Mining (ACAA) +4.9% at 420.6p.
Marks and Spencer's Christmas cheer
Marks and Spencer (MKS) was flat despite beating Christmas forecasts with its first quarterly rise in clothing and homeware sales in nearly two years.
That result will be celebrated by Alasdair McKinnon, manager of the Scottish Investment Trust (SCIN ), who outlined why he was backing new chief executive Steve Rowe's turnaround plan in a video interview with Citywire.
JD Sports (JD) was among the FTSE 250 risers, up 8.6% at 353.5p after reporting it expected full-year profits to beat expectations.
Savills (SVS) was the biggest riser, up 13.3% at 782.6p after a similarly bullish update from the estate agent. Debenhams (DEB) was another 'mid cap' riser, 4.9% higher at 57p, after adding to the Christmas cheer for retailers with strong sales figures.
Spire Healthcare (SPI) was a big faller on the index, down 10.7% at 308.3p after the hospital group announced a £1.5 million hit to profits from delays to the redevelopment of its St Anthony's site. Close behind was AO World (AO), down 12% at 162.3p after the electricals retailer cautioned over its fourth quarter.
Jupiter Fund Management (JUP) dropped 6.5% to 416p after announcing outflows in the fourth quarter, as institutional investors pulled out of its Merlin multi-manager fund range and European strategies.
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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
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Look up the shares
- Shire PLC (SHP.L)
- Hikma Pharmaceuticals PLC (HIK.L)
- AstraZeneca PLC (AZN.L)
- GlaxoSmithKline PLC (GSK.L)
- Tesco PLC (TSCO.L)
- WM Morrison Supermarkets PLC (MRW.L)
- J Sainsbury PLC (SBRY.L)
- Fresnillo PLC (FRES.L)
- Randgold Resources Ltd (RRS.L)
- Anglo American PLC (AAL.L)
- Glencore PLC (GLEN.L)
- BHP Billiton PLC (BLT.L)
- Marks and Spencer Group PLC (MKS.L)
- Hochschild Mining PLC (HOCM.L)
- Kaz Minerals PLC (KAZ.L)
- Centamin PLC (CEY.L)
- EVRAZ plc (EVRE.L)
- Vedanta Resources PLC (VED.L)
- Acacia Mining PLC (ACAA.L)
- JD Sports Fashion PLC (JD.L)
- Savills PLC (SVS.L)
- Debenhams PLC (DEB.L)
- Spire Healthcare Group PLC (SPI.L)
- AO World PLC (AO.L)
- Jupiter Fund Management PLC (JUP.L)
Look up the investment trusts
- Scottish Investment Trust (Ordinary Share)
- Worldwide Healthcare (Ordinary Share)
- Biotech Growth (Ordinary Share)
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by Daniel Grote on Jan 20, 2017 at 13:27