* FTSE 100 down 30.90 points at 6,556.53
* AstraZeneca, Glaxo knocked by MS downgrade
* Imperial Tobacco enjoy post results relief rally
By David Brett
LONDON, Aug 15 Britain's top share index opened
lower on Thursday as the FTSE 100 awaited further evidence on
the economic recovery and stimulus policies with cyclical stocks
and drugmakers among the top fallers.
Volumes were expected to be thin with the Assumption Day
holiday in most of continental Europe.
London's blue chip index was down 30.90 points, or
0.5 percent at 6,556.53, tracking overnight weakness in the U.S.
and Asia, as worries over the timing and extent to which the
U.S. Federal Reserve will withdraw its economic stimulus
continued to hinder the market's progress.
One trader said a combination of thin summer volumes, mixed
Q2 earnings reports, uncertainty around the future of loose
global monetary policy and desire for more convincing growth
data was keeping index moves limited. He anticipated a holding
pattern until things hot up in September with German elections
and potential stimulus tapering by the Federal reserve.
Energy stocks, miners and financials, those most acutely
exposed to the fortunes of the broader economy, all fell early
Steve Ruffley, chief market strategist at spreadbetting and
CFD platform InterTrader said with little economic data for the
market to chew on, investors were waiting for a technical push
higher rather than a fundamental bias.
He said technically there was support for the FTSE 100
around the 20-day moving average at 6,565 and below that
Heavyweight drugmakers GlaxoSmithKline (GSK) and
AstraZeneca (AZN) were among the biggest early fallers,
down 1.4 percent and 0.7 percent, respectively after Morgan
Stanley cut its rating on both companies citing valuation
"We retain conviction in our overweight (European
drugmakers), but move AZN & GSK to underweight (from
equalweight) as risk-reward skews now look less favourable,"
Morgan Stanley says in a note.
Tobacco stocks were the main gainers after Imperial Tobacco
Group (IMT) reported results with traders expressing
relief the update was not accompanied by a profit warning,
although they said an analyst meeting at 0900 GMT would be key
"Expectations were low going into numbers with a few
expecting the company to cut guidance," Simon Maughan, analyst
at Olivetree Financial Group said.
IMT rose 2 percent although the stock has fallen around 9
percent so far in 2013, compared with an 11 percent gain on the
"The stock is very cheap, but has been for sometime. It is a
stale bull for many, so expectations are for the stock to bounce
first thing," he said.
(Reporting by David Brett; Editing by Toby Chopra)