The FTSE 100 fell on Thursday as AstraZeneca dragged the index lower after releasing disappointing trial results for a cardiovascular drug.
As the FTSE 100’s second-largest company by market cap, the 10% drop in shares wiped a significant number of points from the index, completely offsetting a strong session for miners, banks and technology stocks.
AstraZeneca’s decline wiped around £20bn from its market capitalisation – a value greater than the individual market caps of two-thirds of FTSE 100 constituents.
“AstraZeneca’s latest update was more bitter than sweet as it said the drugs don’t work,” said Dan Coatsworth, head of markets at AJ Bell.
“A setback for a promising treatment knocked its share price for six and acted as a major drag on the FTSE 100.
“It meant the UK market was the only major European index to be in the red as others including the Dax and CAC 40 staged a comeback after yesterday’s miserable session.”
Astra’s decline also meant gains for miners were overshadowed. Anglo American, Antofagasta, and Glencore were all higher by around 3% on Thursday as Trump showed signs of returning to the negotiating table after another night of strikes across the Middle East.
“Investors are assessing the likely outcome of the latest round of military action, with both Iran and the US hitting targets in the region. While President Trump has declared the ceasefire to be over, he’s already been heard talking on Air Force One about the prospect of a deal and whether he’s inclined to talk to Iran,” explained Susannah Streeter, Chief Investment Strategist at Wealth Club.
“It already seems that a door may be opening to fresh negotiations, even though both sides continue to talk tough. Oil prices have retreated slightly, with Brent crude hovering around $77 a barrel, down from above $80 yesterday.
“Mining stocks have rebounded, with gold and silver producers benefiting as easing oil prices have taken some of the edge off inflation worries and helped push the dollar lower. A cheaper greenback makes commodities priced in the currency, such as precious metals, more attractive to international buyers.”
Computacenter, a recent addition to the FTSE 100, was the top riser after demonstrating its ability to harness AI to drive profit and revenue growth. Shares were 7% higher at the time of writing.