Rising research and development and normal running costs at pharma giant AstraZeneca (AZN) gave investors an excuse to take blue-chip profits after the FTSE 100 closed at 20-month highs on Thursday. At lunchtime, the UK’s benchmark index had accelerated morning losses to post falls of more than 0.4% at 7,352.99.
Mid-caps largely side-stepped the sell-off with the FTSE 250 about flat at 23,575.99.
After major Asian markets closed on the front foot earlier on Friday, investors have now turned their attention to Wall Street’s open later today. US stocks are could break a five-week winning streak with sentiment sagging over concerns about stronger than expected inflation and the Federal Reserve's likely reaction.
Futures for the Dow Jones Industrial Average, S&P 500 and Nasdaq had all been pointing lower for Friday's open, although this has started to alter as the opening bell nears.
The Dow and S&P 500 have lost about 1% so far this week while the tech-heavy Nasdaq Composite has eased 1.7% back since Monday’s open, breaking a series of gains that kicked off when US companies began to report strong earnings in mid-October.
Key commodities are also under pressure with Brent crude losing 1.7% at $81.46 and gas prices 3.5% down. Gold reversed 0.45% to $1,855 an ounce.
Bitcoin nudged 1.7% lower at $63,874 but remains more than double what it was trading at in July.
FTSE 100’S BIGGEST LOSER
Shares in pharma giant AstraZeneca eased off Friday lows but remains the biggest FTSE 100 loser after saying higher research and development expenses and operating costs had pushed the company to a third quarter loss.
The share price is down by more than 4% at lunchtime at £90.47.
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) plunged 44% lower to £10.709 after saying 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.
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) was also a heavy FTSE 100 faller 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, sending the stock around 3.5% lower to 588p. 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 639.4p.
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 1.25% to 710.8p.
Engineering group John Wood (WG.) fell almost 5% to 191.75p 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%. The shares dropped 5% to 191.1p.
