LONDON MARKET CLOSE: Stocks Slip As Focus Moves To Fed's Yellen

LONDON (Alliance News) - UK equity indices ended lower on Thursday, with pharmaceuticals stocks amongst the biggest blue-chip fallers, as investors look ahead to a speech from US Federal Reserve Chair Janet on Friday at the Jackson Hole conference.

The FTSE 100 closed down 0.3%, or 18.88 points, at 6,816.90. The FTSE 250 ended down 0.7%, or 131.80 points, at 17,882.85, and the AIM All-Share was down 0.3%, or 2.39 points, at 789.67.

The CAC 40 in Paris ended down 0.7% and the DAX 30 in Frankfurt finished down 0.9%.

On Wall Street at the European equity close, the Dow Jones Industrial Average was flat, the S&P 500 was up 0.1% and the Nasdaq Composite was up 0.2%.

Trading volumes have been relatively thin in equity markets in the week so far as investors await Yellen's speech on Friday at 1500 BST. Investors will keep a close eye on her remarks for clues about the outlook for US interest rates, but the Fed Chair is likely to indicate that a US rate hike is still data dependent.

On that front, US durable goods data on Thursday afternoon showed a stronger than expected rise in durable goods orders in July.

The Commerce Department said durable goods orders rose by 4.4% in July after declining by a revised 4.2% in June. Economists had expected orders to climb by about 3.7% compared to the 4.0% slump that had been reported for the previous month.

The bigger-than-expected increase in durable goods orders was partly due to a substantial rebound in orders for transportation equipment, which shot up by 10.5% in July, having fallen by 11.4% in June.

"US durable goods data was really smashing and it has made a lot of difference with respect to what Yellen will say tomorrow," commented Naeem Aslan, chief market analyst at Think Markets. "The data released today has confirmed that we are standing on solid foundations."

At the London stock market close, the pound traded the dollar at USD1.3192, compared to the USD1.3227 seen at the close on Wednesday.

The euro traded the greenback at USD1.1279, largely unchanged from the USD1.1246 at the close on Wednesday.

On the London Stock Exchange, pharmaceutical stocks ended lower after presidential nominee Hillary Clinton raised concerns about the price increase of an allergy product by US pharmaceutical company Mylan.

The price of the company's EpiPen product has risen by 480% since the company acquired it in 2007, moving from USD100 for a 2-pack in 2007 to its current cost of around USD600.

"That's outrageous - and it's just the latest troubling example of a company taking advantage of its consumers," said Clinton in a statement published on her Facebook profile. "It's wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them."

In response to the growing criticism, Mylan said it would lower the costs of the life-saving treatment for some patients. Mylan said it is taking immediate action to further enhance access to the EpiPen product by expanding already existing programs for patients facing the burden of higher out-of-pocket costs.

Hikma Pharmaceuticals ended as the biggest FTSE 100 faller, down 5.3%, whilst Shire was down 3.0%, AstraZeneca down 1.8%, and GlaxoSmithKline down 0.5%.

CRH ended up 3.4%, the best performer in the FTSE 100, after the Irish building materials company said its profit came in six times higher than a year earlier in its first half, reflecting continued positive momentum in the Americas and the inclusion of acquisitions made in the second half of 2015.

CRH said trading conditions in the first half in Europe reflected the modest impact of early-stage economic recovery.

In the Americas, the company said it expects the positive momentum seen in construction markets during the first half of the year to continue into the second, while in Asia the positive demand backdrop experienced in the Philippines looks set to continue for the rest of the year.

Entertainment One shares sunk after ITV withdrew its proposal to acquire the television and film producer.

ITV made an offer for Entertainment One at 236.00 pence per share, valuing it at around GBP1.03 billion, in early August, but this bid was rebuffed by Entertainment One's board as it said it "fundamentally undervalues" the business.

ITV said Thursday that it has a "clear view of the value" of Entertainment One, and it "appears this value is different to the level at which the board of eOne would currently engage in a more formal process."

The broadcaster said it has a "clear strategy to build a stronger, more diversified international business and will continue its disciplined approach to evaluating its healthy pipeline of potential investment opportunities."

ITV ended down 0.2%, while Entertainment One was the biggest faller in the FTSE 250 index, down 17% to 209.28p.

Infrastructure investor John Laing Group, up 7.4%, said its net asset value rose in the first half of 2016 and maintained its full year guidance for investment commitments.

The company's net asset value per share also rose to 263.00 pence at the end of its first half from 242.00p at the end of December, and 224.00p a year earlier.

"These results demonstrate that our business model is delivering consistent results, and has the ability to cope with today's changing macro-economic environment, including the impact of Brexit," said Chief Executive Olivier Brousse.

The price of gold lost some ground on Thursday, trading at USD1,322.00 an ounce at the London equity market close, versus USD1,327.00 at the same time on Wednesday.

Oil prices, however, moved in the opposite direction, with Brent quoted at USD49.40 a barrel at the close Thursday compared to USD48.75 on Wednesday.

Aside from Yellen's speech on Friday, the focus will be on second quarter GDP readings for the UK at 0930 BST and the US at 1330 BST. Before that is the Japanese consumer price index at 0030 BST, the Gfk consumer confidence survey for Germany at 0700 BST and French GDP at 0745 BST.

At 1330 BST, there are US goods trade balance and personal consumption expenditure prices. The Reuters/Michigan consumer sentiment index is at 1500 BST, and the Baker Hughes US oil rig count is at 1800 BST.

In the UK corporate calendar, casual dining company Restaurant Group, concrete paving manufacturer Marshalls, IT infrastructure company Computacenter, and equipment rental firm Lavendon Group all report interim results.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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