LONDON MARKETS: FTSE 100 Closes Lower As AstraZeneca Plunges; Diageo Shares Surge

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Anglo American reinstating dividend

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U.K. stocks slipped Thursday, marking their first loss in three sessions as drug heavyweight AstraZeneca PLC tumbled following a disappointing cancer-drug trial, while the pound pushed another leg higher against the dollar.

The FTSE 100 index ended lower by 0.1% at 7,443.01 after a choppy session that left utility and financial shares among decliners, while consumer goods and basic material shares higher.

"It's the same old story for stock markets in Europe, where by the FTSE 100 is rangebound and the Continental benchmarks like the DAX and CAC 40 are still in the downward trends they have been in since June and May, respectively," wrote CMC Markets analyst David Madden.

"Indices on this side of the pond don't have the enthusiasm as the U.S. ones do, and it is a bit concerning when European markets can't be spurred on by the record highs in America," he said.

Read:U.S. stocks set for more records as Facebook rallies (http://www.marketwatch.com/story/tech-stocks-poised-to-drive-another-record-day-on-wall-street-led-by-facebook-2017-07-27)

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Investors had a raft of corporate earnings reports and updates to sort through Thursday. Standing out was AstraZeneca PLC (AZN.LN) (AZN.LN)as shares plunged 15.4% after the company said a Phase 3 clinical trial (http://www.marketwatch.com/story/astrazenecas-late-stage-trial-failure-sends-its-shares-down-16-and-bristol-myers-merck-stocks-seesawing-2017-07-27) of its Mystic treatment for lung cancer failed to meet its primary endpoint (http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27).

Separately, AstraZeneca swung to second-quarter profit on lower revenue (http://www.marketwatch.com/story/astrazeneca-swings-to-profit-as-revenue-falls-2017-07-27).

But Diageo PLC (DEO)(DEO) topped the FTSE 100 as its shares leapt 6%. The world's largest liquor maker, whose brands include Johnnie Walker whisky, raised its target for profit margin growth (http://www.marketwatch.com/story/diageo-full-year-earnings-lifted-by-currency-boost-2017-07-27) as it benefited from currency tailwinds and logged more sales.

Fed and sterling: In the mix of earnings was the pound, which leapt above $1.31 late Wednesday. That move came after the U.S. Federal Reserve struck what was seen as a somewhat cautious note on U.S. inflation (http://www.marketwatch.com/story/dollar-in-holding-pattern-as-investors-wait-for-feds-signals-on-policy-2017-07-26), a bearish tilt for the greenback.

A stronger pound can eat into revenue and earnings made overseas by multinational companies that populate much of the FTSE 100. The pound on Thursday logged an intraday high of $1.3159 before moving back to $1.3081. Sterling late Wednesday settled at $1.3122 late Wednesday in New York.

Aiding the pound intraday were figures from the Confederation of British Industry showing growth in retail sales in the year to July.

Stock movers: Lloyds Banking Group PLC (LLOY.LN)(LLOY.LN) fell 2.3% as the lender said posted an 18% decline in half-year net profit to GBP1.3 billion (http://www.marketwatch.com/story/lloyds-profit-narrows-on-1-bln-compensation-bill-2017-07-27-3485306), hurt by provisions aimed at compensating customers.

Mining heavyweight Anglo American PLC (AAL.LN) bounced up 3.2% as the company said it's reinstating its dividend (http://www.marketwatch.com/story/anglo-american-reinstates-dividend-as-profit-gains-2017-07-27)for the first half. It also swung to a first-half profit of $1.4 billion.

Smith & Nephew PLC (SN.LN) picked up 3.3% as the maker of knee and hip implants and other medical technology said it's on track to reach its 2017 growth target (http://www.marketwatch.com/story/smith-nephew-profit-rises-on-track-for-targets-2017-07-27) as it reported a 17% rise in half-year pretax profit, to $383 million.

Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) finished higher by 0.7%. The oil major said second-quarter net profit rose to $1.9 billion (http://www.marketwatch.com/story/shells-profit-rises-to-19-billion-2017-07-27) and that it generated enough cash to cover dividend payments and lower debt. Shell Chief Executive Ben Van Beurden said the company is continuing to adapt to lower oil prices.

Read:Shell sees future of 'lower forever' oil prices (http://www.marketwatch.com/story/shell-sees-future-of-lower-forever-oil-prices-2017-07-27)

(END) Dow Jones Newswires

July 27, 2017 12:35 ET (16:35 GMT)