LONDON, June 8 — London’s FTSE 100 index fell today as heavyweight AstraZeneca slipped after a report that it approached Gilead Sciences for a merger, while fears of a slower economic recovery on worries about surging corporate debt also dented sentiment.
The FTSE 100 slipped 0.3 per cent and AstraZeneca shed 3 per cent. Bloomberg News reported on Sunday about the British firm’s approach for a possible megamerger with its US rival to form one of the world’s largest drug companies.
British healthcare stocks lagged the broader market today. Oil and gas stocks jumped 2.6 per cent, supported by higher crude prices.
The blue-chip index is now about 16 per cent away record highs hit in January on a gradual reopening of the UK economy and improving economic indicators.
But an industry body, TheCityUK, has said about a third of the debt being taken on by British firms under the government’s emergency Covid-19 lending plans could be unsustainable, raising the need for fresh capital from new investors.
“The lobby group warned that up to £36 billion (RM194.6 billion) of recent government-backed loan initiatives risk turning toxic. It’s not an easy economic recovery to manage, even assuming no second wave,” said Chris Bailey, European strategist at Raymond James.
The mid-cap FTSE 250 was up 0.3 per cent, with home improvement group Kingfisher rising 2.8 per cent after RBC Capital Markets raised its rating on the company’s stock to “outperform”.
Plus500 Ltd slid 8 per cent after the online trading platform said its quarterly revenue took a hit from client trading wins.
Oxford Biomedica climbed 6 per cent after the gene and cell therapy firm said it signed a new manufacturing agreement to help it scale up production of AstraZeneca’s potential Covid-19 vaccine to cater to demand in the United Kingdom and Europe. — Reuters
