Market report: City cheers GSK’s recovery

Gsk has announced a pioneering collaboration with Google to harness the power of bioelectronics to tackle chronic diseases (Fiona Hanson/PA)

The ink is barely dry on the turnaround plan at GlaxoSmithKline but the City is already cheering the drug maker’s recovery.

After beating expectations with third-quarter profits and announcing plans for a £1bn cost-cutting drive, Barclays said “laggard” GSK was now “out of the woods”. Plans for a £4bn cash return for shareholders also quashed dividend worries and the bank upped the company to “outperform” with a £16 target price. The endorsement helped GSK rise 35p to 1,412p.

After falling more than 1 per cent in early trade, the blue-chip index managed to recover from bleak figures at Tesco, down 12p at 171p, and poor drilling results in Kenya from Tullow Oil, off 22p at 505.5p. The FTSE 100 closed up 19.42 points at 6,419.15.

The British Airways owner IAG topped the index, up 12.8p at 384p, after Credit Suisse added the company to its list of top picks in Europe, arguing that BA has a chance of beating expectations and building a profitable short-haul operation.

BP improved 4.7p to 438.95p after the oil and gas giant announced a major new find in the North Sea.

Car showroom operator Inchcape added 33.5p to 667p on the mid-cap index thanks to a 4.4 per cent rise in third-quarter revenue once exchange rates are factored in.

Photo-booth operator Photo-Me International jumped 9.5p to 128p after confirming it is on track to meet full-year targets.

Silicon Valley venture capital firm Greylock Partners reduced its holding in Just Eat, down 0.7p at 280p, from 4.19 per cent to below 3 per cent.

Akers Biosciences leapt 7.5p to 240p after announcing a joint venture that will see some of its rapid diagnostic products developed and marketed in China.

C4X Discovery, a drug development company spun out of the University of Manchester, had its first day of dealing on AIM after successfully raising £11m. The company rose to 103.5p after being offered at 100p.

Baron Oil improved 0.12p to 1.6p on AIM after receiving drilling approval in Peru. It also revealed it has discovered additional oil and gas reserves at one of its offshore blocks.