AstraZeneca profit falls; WPP flags weakness in U.S. market
U.K. stocks dropped Thursday, with drug maker AstraZeneca PLC among those pushing the blue-chips market lower for the first time in four sessions, but Lloyds Banking Group PLC gained the most in two months following a well-received earnings report.
The FTSE 100 fell 0.5% to 7,249.01, with only the financial and utility sectors advancing.
Investors were also keeping watch on the pound, which briefly traded above $1.29 for the first time in a week, as the dollar edged back.
A stronger pound can weigh on profit and sales made overseas by multinational companies listed on the FTSE 100.
The dollar started pulling lower after 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), in anticipation of the Trump tax presentation. Equity markets worldwide 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.
After a peek above $1.29, the pound on Thursday traded at $1.2889, up from $1.2850 late Wednesday in New York.
Corporates: AstraZeneca shares (AZN.LN) (AZN.LN) fell 1.1% after the drug maker 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.
Lloyds Banking shares (LLOY.LN) (LLOY.LN) leapt 3.8%, its best session since Feb. 22. 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. The U.K. government, which bailed out Lloyds during the financial crisis, is expected to sell its remaining shares in the bank in the coming months.
At the bottom of the FTSE 100, WPP PLC shares (WPP.LN) fell 2.3% 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).
Mediclinic International PLC (MDC.LN) rallied 18% after the international private health care group said holders of a Thiqa medical insurance card won't have a 20% co-payment when they use its facilities in Abu Dhabi.
(END) Dow Jones Newswires
April 27, 2017 05:55 ET (09:55 GMT)