The benchmark FTSE 100 closed lower on Friday in spite of solid progress on Wall Street, with heavyweight miners taking a tumble as gold prices retreated on inflation concerns, and rising costs put the squeeze to pharma giant AstraZeneca (AZN).
At the finish, the UK blue-chip index was down 36.27 points, or 0.5% at 7,347.91, just above the session low of 7,340.49, and well below the day’s peak of 7,402.68.
Mid-caps side-stepped much of the selling but still lost some ground, the FTSE 250 easing 16.5 point, or 0.07%, to end the day and week at 23,557.52.
On Wall Street around London’s close, the Dow Jones Industrials Average was up 173 points, or 0.5% at 36,094, with the broader S&P 500 index gaining 0.7%, and the tech-laden Nasdaq Composite adding 0.9%.
US stocks are in danger of breaking a five-week winning streak with sentiment sagging over concerns about stronger than expected inflation and the Federal Reserve's likely reaction.
Key commodities were also under pressure with Brent crude losing 1% at $81.99 and natural gas prices 2% down. Bitcoin fell 1.3% to $63,862 but remains more than double what it was trading at in July.
FTSE 100’S BIGGEST LOSER
Shares in pharma giant AstraZeneca closed sharply down to top the FTSE 100 loser board after saying higher research and development expenses and operating costs had pushed the company to a third quarter loss.
The share price ended Friday nearly 7% down at £88.01.
Third quarter revenues excluding its vaccine sales grew 34% to $8.8 billion.
AstraZeneca maintained full year guidance for core earning per share to be in the range of $5.05-to-$5.40 with revenues expected to grow in the low-twenties percentage excluding Covid-19 sales and in the mid-to-high twenties percentage including sales from the vaccine.
It is now expecting to make a modest profit from the vaccine as new orders are received.
Shares in critical personal protection company Avon Protection (AVON) lost more than half their value after the company said that it will undertake a strategic review of its body armour business after the body armour plates product failed in ‘First Article Testing’, which will significantly delay approval of the product.
Avon was the day’s biggest faller on the FTSE All-Share, collapsing by more than 51% to end the day at 928p.
The business was previously expected to contribute revenues around $40 million for the year to 30 September 2022, which will now be significantly lower. The company will also delay publishing its 2021 results to assess the carrying value of the related assets.
Under pressure cyber security firm Darktrace (DARK) eased back from heavy losses earlier in the day after a board member sold a chunk of shares. Vanessa Colomar, a non-executive director, sold shares worth over £9 million during a three-day period in early November.
That news sparked a fresh wave of selling by investors, although the share price recovered to show a modest 0.25% decline at 607.5p. The share price closed at 950p on 21 October this year.
ELSEWHERE ON THE MARKET
Housebuilder Redrow (RDW) upped guidance for revenues saying that it expects full year results to approach pre-pandemic levels amid rising house prices and a record order book, helping the shares to gains of nearly 2% at 639.2p.
The company now expects revenues to be around £2.1 billion and to report an operating margin around 9%. The value of net private reservations in the 19 weeks to 5 November 2021 was 2% above the prior year at £672 million.
Real estate company Land Securities (LAND) said it had sold 6-9 Harbour Exchange in London to Blackstone European Property Income Fund for £196.5 million, reflecting a net initial yield of 3.99%.
The disposal was in line with Land Securities’ strategy set out in October 2020, to focus on central London offices, major retail destinations and urban mixed-use areas in London and other cities. The shares added 0.6% to 706.4p.
Engineering group John Wood (WG.) fell almost 5% to 191.9p after initiating a strategic review of the part of its consulting business. The company conceded that the rate of recovery in its projects business had been slower than anticipated largely due to the deferral of activity and awards into 2022.
Full year revenue was expected to be approximately $6.4 billion, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin was expected to be 8.5% to 8.7%.
