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.

News
The clocks go forward an hour at 1am on Sunday 30 March
news
Arts and Entertainment
The Doctor finds himself in a forest version of London in Doctor Who episode 'In the Forest of the Night'
TVReview: Is the Doctor ever going stop frowning? Apparently not.
Sport
footballMatch report: Real fight back to ruin Argentinian's debut
News
Bruce, left, with Cream bandmates Ginger Rogers, centre, and Eric Clapton in 1967
people
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
News
i100
News
people
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker