Market Report: Glaxo takes a tumble as top drug is challenged

AS SHARES waited anxiously for the US interest rate decision, Glaxo Holdings suddenly came under pressure as a new challenge emerged to its top-selling ulcer drug, Zantac. In busy trading the price fell 25p to 658p, before closing at 662p.

The latest threat comes from the Ciba-Geigy giant, which has given notice of a new drug which, it says, will not infringe Glaxo's US patent. Glaxo is not so sure. It is investigating the drug and 'is considering all courses of action open to it, including bringing legal proceedings'.

Zantac, which has been used to treat more than 150 million patients since its introduction in 1981, accounts for half of Glaxo's profits and sales. Its biggest rival is Losec, produced by Astra, the Swedish group.

Wellcome was another drugs group under the weather. NatWest Securities was responsible. The shares slipped 5p to 623p as NatWest said they should be sold. It expects an 8 per cent interim profit improvement to pounds 350m to be announced tomorrow, a significant slowdown from the group's established growth performance.

The FT-SE 100 index had an uneven session, mirroring the concern over US interest rates. It swung from a 22.1-point gain to an 11.1 fall, ending up 3.5 at 3,201.5.

The crucial US interest rate move was not known until after the stock market closed. The decision to nudge rates higher, although expected, could push shares lower today.

The growing uncertainty over Russia and North Korea also dulled activity although turnover was a little better than the dismal level reached on Monday.

Rights issue worries returned with talk of a big cash call being prepared for tomorrow. Rumours of a blue-chip call have circulated for the past month.

Allied-Lyons, long thought to be a candidate, could be on the launchpad. The shares rose 5p to 619p.

Unilever, the food and detergent giant, ended 10p higher at 1,066p on stories it was near to launching a revolutionary new detergent. The rumour flowed over Hickson International, which has said it is involved in producing a chemical for a new detergent product. The shares gained 8p to 217p.

Imperial Chemical Industries was also in demand, up 23p to 806p on the back of a Goldman Sachs recommendation. But Courtaulds remained unsettled as Kleinwort Benson said sell. On Monday Cazenove was thought to have lowered its profit estimates.

Support from S G Warburg lifted Associated British Ports 8p to 591p. Warburg also took a shine to Caradon, pushing the shares of the building materials group 5p higher to 397p.

Barclays de Zoete Wedd sell advice hit Gerrard & National, the discount house which has moved into other operations including stockbroking and market-making in gilts. The shares fell 11p to 423p.

Talk of a stock overhang lowered Johnson Fry, famed for its business expansion schemes, 5p to 313p.

WPP slipped 3p to 106p. There was talk of a seven million line hovering, presumably from one of the group's banking supporters who are now free to sell.

Lasmo, down 3p at 128p, remained nervous awaiting today's results. Most other oils firmed ahead of Friday's Opec meeting, with British Petroleum up 6.5p at 377.5p.

Scottish power shares were firm with talk that Smith New Court had moved from hold to buy. Scottish Hydro-Electric gained 14p to 375p and Scottish Power 10p to 395p.

Lucas Industries, reflecting downgradings following Monday's figures, retreated 10p to 199p.

Vodafone had a difficult session, off 13p at 539p on US selling. Vendome, the luxury goods group which has been firm on the LVMH trading report, rose a further 13p to 443p.

Banks had a mixed session with interest rate worries unsettling sentiment. National Westminster lost 8p to 464p in continuing response to its US acquisition. Standard Chartered again attracted selling, off 18p at 1,106p.

Pentos, the retail group, weakened as rights issue worries resurfaced. The shares fell 3.5p to 33p. Great Universal Stores firmed 17p to 576p. The consolidated Upton & Southern shares started at 40p, ending at 38p and the nil paid rights went from 10p to 8p.

Motor World gave up 14p to 314p after cautious comments that 'wet weather' has affected growth in the first half year.

The FT-SE 100 index ended 3.5 points higher at 3,201.5 after a roller-coaster session. The FT-SE 250 index fell 1.4 to 3,853.1. Turnover was 678 million shares with 37,801 deals. The account ends on Friday with settlement on 5 April. Gilts were firm.

Another recruit to the rule 535 market. Within the next few weeks share dealings are expected to start in Golden Rose Communications, parent of the Jazz FM radio station. A placing with institutions at 107p has raised pounds 4m. The cash will be used for expansion, including a Jazz FM in the North-west. The stockbroker Henry Cooke, Lumsden is promoting the flotation.

There is talk of a deal involving Shield, a property group which takes in the Stickley & Kent estate agency and in December moved into computers by taking over Kamco, a maker of customised personal computers. The shares held at 17p. Shield made losses in its last two years but the chairman, Norman Mazure, reported a modest profit in the last half-year.

CrestaCare, the nursing homes group, which has swung from losses of pounds 1.58m to a pounds 341,000 profit, met institutions yesterday and will hold investment meetings in Scotland today and tomorrow. Credit Lyonnais Laing has lifted this year's estimate from pounds 5.5m to pounds 5.7m and is looking for pounds 6.1m next year. Barings has become merchant banker to the group, down 1p at 39p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...

SThree: Trainee Recruitment Consultant

£20000 - £40000 per annum + competitive: SThree: Exciting career prospect for ...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Day In a Page

A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935