Market Report: AstraZeneca hit on talk of R&D policy risks

AstraZeneca took a tumble yesterday after analysts forecast black clouds ahead for Britain's second-largest drug maker after it posted disappointing third-quarter numbers.

The company's results showed profits had fallen by more than 25 per cent. It blamed higher legal costs as well as pressure from the release of generic versions of some of its major products in the US. However, Seymour Pierce, which stated that it views "the general trend as consistent with our thesis of exposure to generic erosion" added that the company's longer-term policy of moving away from research and development carries serious risks.

Mike Mitchell, Seymour Pierce's healthcare analyst, pointed to the problems that come with a "greater reliance on external programs which I don't think will have been derisked", as the initial development would have been "in an environment where biotechs have been scrabbling for funding". His recommendation was "reduce," and it closed at 3,139.5p, down 106p.

Overall, the FTSE 100 put two days of falls behind it to finish on 5,677.89, a rise of 31.87 points, as the blue-chip index was helped by positive results from Royal Dutch Shell, which gained 9p to 1,962p. Another riser was BHP Billiton, up 57.5p to 2,221p, after Potash, the Canadian fertiliser producer which it is targeting in a hostile takeover, announced a 61 per cent jump in net income for the third-quarter.

After experiencing falls earlier this week, despite posting a solid set of results, chip-maker Arm Holdings began to fight its way back up, gaining 11.6p to 372p. H2O Markets continued to be a fan of the stock and reiterated its "buy" recommendation. Daniel Harris, head of dealing at the broker, said chip-maker "is exceptionally well positioned to benefit from the continued demand in the smartphone and the iPad", and he also picked out its licensing agreement with Microsoft as a positive factor.

Also going strongly was Vodafone, after France Telecom's third-quarter results outstripped forecasts, and last night it was on 170.7p, up 4.4p. Joining it near the top of the index was Roll- Royce, up 14p to 643.5p, on the back of news that it had signed a significant deal with the Korean-based company STX Engine. The aircraft engine manufacturer said the deal will extend its reach in Asia.

The worst performer on the top tier was Aggreko, even as it raised its outlook for the year, and it fell 70p to 1,592p. This came despite Investec adjusting the company's target price to 1,820p from 1,700p, although investors may have been put off by Panmure, whose advisers said that for them "the shares remain a hold given the expectation already in the price".

On the mid-tier, figures published yesterday on the difficulties facing first-time buyers in the UK caused the housebuilders to take a dive. According to the Home Builders Federation's report "Broken Ladder", an average first-time buyer in London would have to save all of their earnings for just under three years before being able to afford a deposit. On the same day, Nationwide released figures indicating that house prices had fallen 0.7 per cent in October. As a result Taylor Wimpey dropped 0.4p to 22.93p while Bellway shed 3.5p to 550p.

Coming top on the FTSE 250 was Hansen Transmissions. The wind-turbine gearbox maker put on 3.5p to 45p despite confirming that it still expected to finish the year with a 10 per cent revenue drop. Earlier this month it recommended an approach worth €75m (£66m) from the Japanese firm Sumitomo Heavy Industries for its industrial gearbox division.

Last week, market chatter was fuelled by news of a potential takeover of Jardine Lloyd Thompson, the insurance group, causing its price to soar. Yesterday's gossip was that an informal approach that priced the company at 720p had been rejected. Chances of a proper bid were not rated highly among investors, and the company enjoyed a small rise of 8p to 587p.

Premier Foods had a rockier time, falling 0.75p to 18p, as it declared a 4.2 per cent drop in group sales from July to September. The company – which produces a number of household favourites including Hovis and Branston Pickle – said that its non-branded goods had been hit the hardest as shoppers turned away from supermarket own-label products.

In the wider market, Mouchel posted a full-year loss of £13.5m, nearly half a million more than in the previous 12 months. As a result its shares plummeted 38p to 90p. The company has been hit by the deficit-reduction plans, it said, which have caused a "postponement or reduction in scale" of many of its projects.

Those investors which went in heavily on Desire Oil, following gossip that it had not only found oil but was about to be the subject of a takeover attempt, found themselves disappointed on both counts: the company published a statement yesterday saying no approaches had been made and no oil had yet been found. There was thus no repeat of Wednesday's 50.75p rise, and instead it closed down 26.75p at 90.75p.

Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
peopleMathematician John Nash inspired the film Beautiful Mind
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine