After the momentous week which saw the Federal Reserve raise interest rates for the first time in almost nine years, pharma giant GlaxoSmithKline (LON:GSK) made its own splash in the market on Friday.
The pharmaceuticals colossus has agreed two deals with Bristol-Myers Squibb to acquire its late-stage HIV R&D assets and to acquire its portfolio of preclinical and discovery stage HIV research assets.
Late-stage assets, include fostemsavir, an antiviral drug currently in phase III development for already heavily treated HIV patients and another antiviral currently in phase IIb development.
The late-stage assets are being bought for an upfront payment of US$317mln, and could be worth as much as US$518mln plus royalties.
The preclinical and discovery stage assets will cost US$33mln upfront, and could be worth as much as US$587mln.
David Redfern, chief strategy officer, said: “These acquisitions strengthen our leadership and innovation in HIV, one of our core areas of scientific research at Glaxo”.
Shares in the company eased around 6p to 1,335p.
It was one of a number of fallers on the FTSE100, which lost around 36 points to 6,605 by lunch, after three consecutive days of gains.
Alastair McCaig, at spread-betting firm IG, said: “Blink and you’ll have missed it, as the US interest hike feel good factor looks to have already evaporated.”
On the corporate front, the miners recovered as, while precious metals fell in the aftermath of Federal Reserve’s decision to raise interest rates, some analysts have suggested that the rate hike had already been priced into the market.
Anglo American (LON:AAL) was the biggest gainer of the index, rising 3.9%, or 10p, to 273p, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) were also some of the bigger risers.
Oil firms joined their mining counterparts as investors softened their stance on commodities.
Despite a barrel of Brent crude easing a further 0.3% to US$36.92, Shell (LON:RDSB) gained around 1% to 1,474p while BP also nudged into positive territory.
In the small cap space, shares in Electric Word (LON:ELE) rocketed as it announced it has agreed to sell its 70% stake in online magazine iGaming Business to Clarion Events for around £13.8mln.
The deal values iGB, an online magazine focused on the business-to-business (B2B) online gaming market, at £19.7mln. Shares in Electric Word jumped around 17% to 3.5p.
Conversely, WH IRELAND (LON:WHI) shares fell on Friday after it cautioned that a substantial fine from City regulator the FCA is likely.
In a stock market statement it said that it continues to discuss a possible negotiated settlement with the watchdog, relating to what it referred to as a “previously communicated contingent liability” in the period between January and June 2013. Shares dropped 8.5p to 92p.
Also lower was Infrastrata (LON:INFA), which slumped 12% to 1.4p. The company announced a placing of around 36mln shares at 1.25p per share to raise £450,000.
MORNING REPORT
London’s blue-chip stocks started the day lower but have pared their losses throughout the morning.
The UK’s main market looks set to end the week around 2.5% higher after the Federal Reserve decided to raise interest rates on Wednesday.
Michael Hewson, at CMC Markets, said: “As we come to the end of a choppy but positive week and the last full trading week of 2015, European equity markets still remain well below their highs for the month, despite the rebounds of the last three days, and could well be rather choppy day with options expiries due today.”
Initially, the FTSE100 dropped around 50 points, but after half an hour of trading, the index had settled back to just 9 points lower to 6,093.
Connor Campbell, at spread-betting firm Spreadex, said: “It looks like there is going to be a battle for investors’ hearts and minds between the dark side (any further twists in the current commodity crisis) and the light (any remaining post-rate hike good will).”
On the corporate front, the miners recovered after commodity prices slumped after the Fed’s landmark interest rate decision.
While precious metals fell in the aftermath, some analysts have suggested that the rate hike had already been priced into the market.
Anglo American (LON:AAL) was the biggest gainer of the day, rising 3.1%, or 8p, to 271p, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) rounded out the top three.
Elsewhere, Sports Direct’s (LON:SPD) majority owner Mike Ashley is to personally review the group’s controversial working conditions and employment terms for agency staff.
The British billionaire and leisure-wear magnate will make sure Sports Direct not only meets legal obligations but also provides a good environment for the entire workforce, the company said. Shares dropped 5p to 571p initially but recovered to 576p, half a penny lower.
Away from the index, metal treatment specialist Bodycote (LON:BOY) jumped around 5%, or 28p, to 568p after an upgrade from N+1 Singer.
The broker has warmed to the stock, upping its rating to ‘buy’ from ‘hold’.
In the small cap universe, Electric Word (LON:ELE) was the morning’s biggest gainer as it has agreed to sell its 70% stake in iGaming Business to Clarion Events for around £13.8mln.
The deal values iGB at £19.7mln. Shares in Electric Word jumped by a third to 4p.
Elsewhere, investment company Mediazest (LON:MDZ) said it has secured a number of material additional contracts since October and completed several “significant” projects.
The company said this year has seen the company record its best ever results, sending shares 17.8% to 0.17p.
Conversely, Impact Holdings (LON:IHUK) fell as losses widened due to upfront legal costs as it tries to recover money owed by a third party. Shares dropped almost 30% to 73p.
PRE-MARKET
It looks like a case of back to reality for the FTSE 100 as we wrap up last full trading week of the year.
The mood had been on of mild euphoria following the US Federal Reserve decision finally to the trigger on an interest rate hike.
However Britain’s blue chip index is expected return to its pre-occupation with commodity prices now the buzz has begun to fade.
Oil, which slipped below US$35 a barrel overnight, is likely to be the early sentiment driver, with Footsie set to fall 35 points on open to 6,067.54.
Wall Street ended on a bum note as the aforementioned commodity worries were compounded by some fretting over the US manufacturing sector, after numbers issued by the Philadelphia Fed showed it contracted.
The Dow Jones ended a wild session down more than 200 points, while the broader based S&P 500 31 points, or 1.5%.
“The initial stock market relief rally in the wake of Wednesday’s Fed decision rapidly turned to dust in the US last night, after European markets had closed as a renewed plunge on commodity prices threw US markets into reverse gear, with crude oil prices headed back towards their multi year low of earlier this week,” observed Michael Hewson of CMC Markets.
Asia’s main markets were mixed with Japan’s Nikkei down 1.9%, but the Hang Seng in Hong Kong and the Shanghai Composite up 0.1% and 0.26% respectively.
On a thin day for scheduled news here in the UK, cruise operator Carnival’s trading statement is perhaps the most significant piece of news expected by the market.