LONDON MARKETS: FTSE 100 Slips As AstraZeneca Slides

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Oil shares fall alongside 1% decline for crude prices

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U.K. stocks edged down Thursday, with drug maker AstraZeneca PLC weighing on the London blue-chip benchmark a day after it logged its biggest gain in more than two months.

The FTSE 100 was down 0.2% at 7,404.57, led lower by health care, tech and oil and gas shares.

The index on Wednesday jumped 1.2% (http://www.marketwatch.com/story/ftse-100-drives-higher-as-burberry-climbs-pound-declines-2017-07-12), the biggest percentage gain since April 24, after U.S. Federal Reserve Chairwoman Janet Yellen said interest rates in the world's largest economy don't have to rise all that much further.

Yellen, who testified before the House Financial Services Committee on Wednesday, will appear before the Senate Banking Committee on Thursday.

The pound was buying $1.2934, up from $1.2884 late Wednesday in New York, ahead of her appearance Thursday.

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"Market reaction [on Wednesday] was also reinforced by her comments that inflation was running below target and that rates wouldn't need to rise much further to get back to neutral," said Michael Hewson, chief market analyst at CMC Markets, in a note.

"This comment in particular suggests that the Fed believes that a lot of the heavy lifting on rates may well have been done in the short term, which may help explain why we saw long term yields slip back down to a one week low, and certainly takes a September rate rise off the table."

Stock movers: But Thursday's session saw shares of AstraZeneca PLC (AZN.LN) (AZN.LN) drop 3.9%. The shares were losing the most since November following reports Chief Executive Pascal Soriot was set to become CEO of Teva Pharmaceutical Industries Ltd. (TEVA) .

Soriot "is a quality CEO who has delivered a c.40% increase in the dollar share price (outperforming EU pharma) and his departure would not be a positive depending of course on the identity of any replacement," said Liberum analyst Roger Franklin in a note. But any significant fall in the shares could present a buying opportunity for long-term investors, he added.

BT Group PLC (BT.A.LN) rose 2.1% as the U.K.'s Office of Communications said it's setting up dedicated measures to monitor BT's Openreach network unit (http://www.marketwatch.com/story/uk-regulator-to-monitor-bts-openreach-unit-2017-07-13).

Shares of oil producers BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) were down 0.7% and 0.8%, respectively, losses for oil prices accelerating after the International Energy Agency said OPEC production rose in June.

See:U.S. shale oil investment surges more than 50% in 2017, IEA says (http://www.marketwatch.com/story/us-shale-oil-investment-surges-more-than-50-in-2017-iea-says-2017-07-11)

But a slight pull back in the U.S. dollar was supportive for dollar-denominated metals prices, and in turn, shares of most metals producers. Glencore PLC (GLEN.LN) rose 1.3%, Anglo American PLC (AAL.LN) tacked on 1.2% and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gained 0.9%. But Fresnillo PLC (FRES.LN) was down 0.1%.

As well, June trade data indicated continued strengthening in the Chinese economy (http://www.marketwatch.com/story/china-june-exports-beat-forecasts-with-113-gain-2017-07-13). China is a key buyer of precious and industrial metals.

Shares of home builders held to higher ground even after the Royal Institution of Chartered Surveyors said U.K. house prices grew at a much slower pace in June (http://www.marketwatch.com/story/growth-in-uk-housing-prices-slows-significantly-2017-07-12) compared with May. Taylor Wimpey PLC (TW.LN) claimed a 0.9% rise, Barratt Developments PLC (BDEV.LN) was up 0.3% and Persimmon PLC (PSN.LN) picked up 0.2%.

Babcock International Group PLC (BAB.LN) rose 0.8%, but pared gains, after the engineering support services group said its financial year is progressing in line with expectations (http://www.marketwatch.com/story/babcock-sees-stable-order-book-bid-pipeline-2017-07-13), with its order book and bid pipeline stable.

(END) Dow Jones Newswires

July 13, 2017 04:34 ET (08:34 GMT)