- FTSE 100 at highest since April 4th
- Astra jumps on Pfizer takeover speculation
- GSK announces massive three-part deal with Novartis
techMARK 2,741.04 +2.28%
FTSE 100 6,691.88 +1.01%
FTSE 250 16,103.19 +1.23%
Heightened M&A activity in the pharmaceutical sector gave UK markets a boost on Tuesday, sending London's FTSE 100 towards the psychological level of 6,700.
AstraZeneca was rising strongly on speculation that Pfizer could make a takeover approach for the company, in a transaction valued in the region of £60bn, representing the biggest deal ever in the industry's history and the largest foreign takeover of a UK business on record.
Meanwhile, GlaxoSmithKline (GSK) jumped after announcing a massive three-part deal with Swiss pharmaceuticals peer Novartis, which will see shareholders receive a £4bn capital return.
US companies Eli Lilly and Allergan were also making headlines on the back of M&A speculation today, lifting sentiment across the sector.
Investors returned to their desks in a positive mood following the four-day Bank Holiday weekend, sending the FTSE 100 1% higher to 6,692 by midday.
London's benchmark index has not closed above this level since April 4th, when it finished the session at 6,695.55. It has not consolidated above the key 6,700 level since March 7th.
"Traders have stumbled back to their desks this morning after an indulgent long weekend of chocolate consumption. Whilst the economic day has gotten off to a slow start, there has been bid activity that has seen the premier index rise to its highest level in around two weeks," said Chris Beauchamp, Market Analyst at IG.
There is no major economic data scheduled for today's session, with the exception of some housing data from the States later in the day. US stock futures were pointing to a subdued start on Wall Street later on.
Astra, GSK lead pharma stocks high
AstraZeneca was trading 7% higher after The Sunday Times said Pfizer made a tentative $100bn approach for its British-Swedish rival. While AstraZeneca reportedly rejected the informal offer, Analyst Andrew Baum from Citigroup said he expected Pfizer to "push aggressively ahead with a second approach".
Investors at GSK celebrated the company's announcement of a new Consumer Healthcare business to be created with Novartis, along with the exchange of certain assets in a major three-part transaction. The proposed deal "accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings", said GSK's Chief Executive Sir Andrew Witty.
Others in the sector including Shire, Hikma, BTG and NMC Health were also making decent gains, along with pharmaceutical and biotech investment trust Worldwide Healthcare.
Heading the other way were resource stocks with Anglo American, Rio Tinto, Randgold, Glencore Xstrata and Fresnillo moving in the red.
Even Polymetal was lower despite the Russian precious metals producer saying it had made a "strong start to the year" with 34% growth in production. Sales, however, lagged output during the period due to seasonal factors.
FTSE 250-listed telecoms provider Colt dropped 12% after saying margin pressures chipped away at quarterly earnings. The company warned that full-year operating profit before restructuring charges is expected to range between 5% and 10% below current consensus estimates.
FTSE 100 - Risers
AstraZeneca (AZN) 4,049.50p +7.09%
GlaxoSmithKline (GSK) 1,644.50p +5.48%
Shire Plc (SHP) 3,054.00p +4.41%
Hargreaves Lansdown (HL.) 1,242.00p +3.24%
Sports Direct International (SPD) 823.00p +3.00%
Melrose Industries (MRO) 288.70p +2.45%
Experian (EXPN) 1,107.00p +2.41%
Royal Mail (RMG) 521.00p +2.36%
Sage Group (SGE) 411.90p +2.21%
ITV (ITV) 190.30p +2.20%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,662.00p -1.19%
Anglo American (AAL) 1,529.00p -1.16%
Standard Chartered (STAN) 1,317.00p -0.64%
Fresnillo (FRES) 864.00p -0.46%
Rio Tinto (RIO) 3,275.50p -0.40%
Babcock International Group (BAB) 1,212.00p -0.33%
Royal Dutch Shell 'B' (RDSB) 2,385.50p -0.31%
Barratt Developments (BDEV) 373.80p -0.27%
Glencore Xstrata (GLEN) 313.60p -0.18%
Tullow Oil (TLW) 866.50p -0.12%
FTSE 250 - Risers
Worldwide Healthcare Trust (WWH) 1,292.00p +6.34%
JD Sports Fashion (JD.) 1,819.00p +4.84%
Heritage Oil (HOIL) 268.70p +4.72%
Hikma Pharmaceuticals (HIK) 1,562.00p +4.41%
Ocado Group (OCDO) 365.40p +4.34%
Xaar (XAR) 893.00p +4.32%
BTG (BTG) 551.00p +4.06%
Spectris (SXS) 2,363.00p +4.01%
Intermediate Capital Group (ICP) 447.50p +3.64%
Phoenix Group Holdings (DI) (PHNX) 662.50p +3.52%
FTSE 250 - Fallers
COLT Group SA (COLT) 127.40p -11.96%
Diploma (DPLM) 656.00p -1.87%
Centamin (DI) (CEY) 52.85p -1.67%
Croda International (CRDA) 2,548.00p -1.09%
QinetiQ Group (QQ.) 219.20p -1.08%
PayPoint (PAY) 1,169.00p -0.93%
African Barrick Gold (ABG) 256.70p -0.93%
Polymetal International (POLY) 608.50p -0.81%
Kazakhmys (KAZ) 232.30p -0.73%
esure Group (ESUR) 252.30p -0.67%