You are here
Europe: Pharma weighs on shares but FTSE sets record-breaking streak
[MILAN] European shares ended off highs on Wednesday as pharma stocks turned lower on worries over pricing pressure in the US following remarks by Donald Trump in his first news conference.
Europe's index of healthcare stocks fell 0.7 per cent, weighing on the region's benchmark STOXX Europe 600 index which inched up 0.2 per cent at the close.
In spite of the turn into negative territory of drug stocks, Britain's blue-chip FTSE 100 rose 0.2 per cent to a new record high, closing higher for the twelfth consecutive session in its longest winning streak in the index's 33-year history. Cumulative gains however over the period were limited to 3.5 per cent.
The US President-elect commented on the need for competitive drug pricing saying pharmaceutical companies are"getting away with murder" by charging high drug prices.
London-listed drugmakers Shire and Astrazeneca fell 3.2 per cent and 1.8 per cent, leading losers in their sector, while Swiss heavyweights Novartis and Roche both fell more than 1 per cent, causing the SMI index to end with a drop of 0.3 per cent.
Elsewhere, retail stocks were back in focus after a well-received update from British grocer Sainsbury.
Sainsbury's shares rose as much as 7.8 per cent after Britain's second-biggest supermarket beat forecasts for underlying sales in its Christmas quarter. The stock however ended off highs with a gain of 1 per cent.
This followed peer Morrison's strong performance in the previous session after it too reported robust figures. "UK supermarkets seem to be in rude health following bullish statements from both Morrison's and Sainsbury's," said IG analyst Josh Mahony.
Mediaset rose 5.9 per cent, topping gainers on the STOXX.
Traders cited a report that Vivendi chief Vincent Bollore could offer a stake in the French media group to the Berlusconi family in a bid to end a dispute over control of the Italian broadcaster.
Another outstanding gainer was Danish bioscience company Chr Hansen following consensus-beating first-quarter earnings. The stock rose 5.1 per cent.
But British aero engineering firm Cobham fell 14.9 per cent, after it missed its profit target and scrapped its final dividend.
Cobham's 2016 trading profit fell short of a target it had cut just two months before the end of the year because of poor trading. It was headed for its worst day ever, through nearly three days' trading in mid-morning.
UBS equities analysts said a recent change in management, with a new CEO and CFO, meant further revisions were likely once new managers undertake a deep review of the business.