Pound holds above $1.31 after U.S. Federal Reserve statement
U.K. stocks wobbled Thursday, with shares of drug heavyweight AstraZeneca PLC tumbling after a disappointing cancer drug trial, as the pound pushed another leg higher against the dollar.
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The FTSE 100 index was up less than 2 points at 7,453.49 after opening in the red. Health care and financial shares declined, but consumer goods and commodity stocks moved higher. The benchmark on Wednesday rose 0.2%.
Investors had a raft of earning reports and corporate updates to sort through on Thursday. Standing out was AstraZeneca PLC (AZN.LN) (AZN.LN) as its shares plunged 15% as the company said a Phase 3 clinical trial 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 reported it swung to a profit, but revenue fell (http://www.marketwatch.com/story/astrazeneca-swings-to-profit-as-revenue-falls-2017-07-27), in the second quarter
Diageo PLC (DEO) (DEO) , meanwhile, topped the FTSE 100 as its shares rose 5.9%. 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 benefitted from currency tailwinds and logged more sales.
Fed and sterling: In the mix of earnings was the pound, which leapt above $1.30 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 climbed to $1.3136, from $1.3122 late Wednesday in New York.
A "more-dovish-than-expected Fed policy update last night .... sent [the U.S. dollar] lower, resulting in unwelcome [pound] and [euro] strength," said analysts at Accendo Markets.
"The FTSE only outperforms thanks to the weaker USD buoying already solid copper and oil prices to help the major miners and oil majors," they said.
Stock movers: Mining heavyweight Anglo American PLC (AAL.LN) bounced up 3.8% 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.
Shares of Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) fell 1.9% 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.
(END) Dow Jones Newswires
July 27, 2017 04:03 ET (08:03 GMT)