* FTSE 100 closes down 0.1 percent
* Glaxo says staff may have broken China bribery laws
* AstraZeneca also visited by police
By Simon Jessop
LONDON, July 22 Britain's blue-chip share index
ended slightly lower on Monday, weighed by GlaxoSmithKline's
problems in China, but remained close to a retest of
Glaxo, the FTSE 100's biggest pharmaceutical company
by market capitalisation, fell 1.2 percent and accounted for
more than half the broader index's decline after it said some
staff in China appeared to have broken the law.
Deutsche Bank analyst Mark Clark said the market would
likely find out more at Glaxo's quarterly results on Wednesday,
and added that China sales made a relatively small contribution
to the company's earnings.
"China - while heading to become the world's number 2 pharma
market - is still only around 3.5 percent of GSK's Pharma sales
and in our view almost certainly a smaller proportion of its EPS
(earnings per share)," he said.
Peer AstraZeneca erased early gains to end 0.1 percent lower
after it said Chinese authorities had visited its Shanghai
office, making it the third foreign firm to be targeted after
GSK and Belgium's UCB.
The pharma sector weakness acted as a drag on the broader
index, which ended down 0.1 percent, or 7.5 points, at 6,623.17
points - around 30 points off a fresh test of the highs hit in
Ian Williams, equity strategist at Peel Hunt, said index
moves over the next few weeks would likely be driven by earnings
releases, and that relatively favourable year-on-year
comparisons could lead to companies beating forecasts.
"We need that because valuation has come a long way. We're
back above 12 times forward earnings now on the All Share, on
consensus numbers. While that's not expensive, it's come from 9
times just over 12 months ago and all the performance has been
from a re-rating, whereas forward earnings have been flat," he
FTSE 100 companies scheduled to report quarterly earnings
are expected to post an average earnings beat of 3.6 percent,
StarMine data showed.
(Additional reporting by Toni Vorobyova and Alistair Smout;
Editing by Ruth Pitchford)