AstraZeneca profit falls; WPP flags weakness in U.S. market
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U.K. stocks finished with losses Thursday, with a rallying pound helping to push the blue-chips market lower for the first time in four sessions, but Lloyds Banking Group PLC gained following the lender's well-received earnings report.
The FTSE 100 fell 0.7% to end at 7,237.17. With one trading session left in the week and month, the index's week-to-date gain is 1.7%, but it's down 1.2% in April.
The index on Thursday was dragged to session lows late in afternoon trade as a selloff in oil prices (http://www.marketwatch.com/story/crude-oil-slides-to-4-week-low-as-fears-grow-over-rising-us-output-2017-04-27) whacked shares of BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN). Oil was under pressure after Libya's largest oil field came back online. BP closed 2.4% lower, while Royal Dutch Shell lost 2%.
The pound was a source of pressure for blue-chips as it crept above $1.29 for the first time in a week, as the dollar edged back. After a peek above $1.29, the pound (http://www.marketwatch.com/story/mexican-peso-canadian-loonie-gain-after-trump-administration-backs-down-on-nafta-2017-04-27) on Thursday traded at $1.2894, up from $1.2850 late Wednesday in New York.
A stronger pound can weigh on profit made overseas by multinational companies listed on the FTSE 100.
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Stocks fell Thursday and the U.S. dollar ebbed after an outline of U.S. President Donald Trump's long-anticipated plan for tax cuts and reforms was presented Wednesday. The tax proposal included cutting the corporate tax rate to 15% from 35%. But many analysts said Thursday the presentation lacked details.
"In summary, Trump knows how to spend and how much to spend, yet isn't sure about where to get the funding. We doubt that future revenues from aggressive import tax increases would be enough to pay the expensive bill in the long-run," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in an note.
The FTSE 100 on Wednesday rose 0.2% (http://www.marketwatch.com/story/ftse-100-downshifts-after-wave-of-earnings-ahead-of-trump-tax-rollout-2017-04-26), partly in anticipation of the Trump tax presentation. Equity markets world-wide in recent months have hit record highs in part in anticipation of lower U.S. corporate taxes and looser regulation on the financial sector under the Trump administration.
U.K. stocks showed little reaction to the European Central Bank leaving monetary policy unchanged (http://www.marketwatch.com/story/ecb-leaves-rates-unchanged-reiterates-asset-purchase-plans-2017-04-27).
Read the live blog recap of ECB President Mario Draghi's news conference. (http://blogs.marketwatch.com/thetell/2017/04/27/ecb-live-blog-mario-draghi-expected-to-avoid-taper-talk/)
Other notable movers: Mediclinic International PLC (MDC.LN) rallied 18% for the FTSE's biggest gain Thursday after the international private health care group said holders of a Thiqa medical insurance card won't have a 20% copayment when they use its facilities in Abu Dhabi.
Lloyds Banking shares (LLOY.LN) (LLOY.LN) closed 2.3% higher after the lender said first-quarter net profit surged to GBP766 million (http://www.marketwatch.com/story/lloyds-profit-up-as-uk-stays-resilient-to-brexit-2017-04-27) from GBP405 million a year earlier, aided by a decline in bad loans.
AstraZeneca PLC's shares (AZN.LN) (AZN.LN) ended 0.3% higher, bouncing back from losses that came after the drugmaker said first-quarter profit declined 17% to $537 million (http://www.marketwatch.com/story/astrazeneca-profit-down-as-sales-for-key-drug-fall-2017-04-27) as it battles declining sales of its blockbuster cholesterol pill Crestor.
WPP PLC shares (WPP.LN) closed down 2.4% after the world's largest advertising company said revenue growth slowed in the first quarter as clients spent less in the U.S. and emerging markets (http://www.marketwatch.com/story/wpp-revenue-growth-lags-as-us-clients-spend-less-2017-04-27).
(END) Dow Jones Newswires
April 27, 2017 12:00 ET (16:00 GMT)