United Kingdom

Drugmakers, oil majors drag FTSE 100 lower; Avast surges

4 minute read

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo

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  • Cybersecurity firm Avast surges on merger talks
  • Experian jumps on raising annual outlook
  • UK jobs surge in June with a record 7.3% pay rise
  • FTSE 100 down 1.1%, FTSE 250 off 1.0%

July 15 (Reuters) - London's FTSE 100 marked its worst day in a week on Thursday dragged down by pharmaceutical and energy stocks, while UK-based cybersecurity firm Avast jumped to the top of the index amid merger talks.

The blue-chip FTSE 100 index (.FTSE) ended 1.1% lower, weighed by drugmakers (.FTNMX201030) which fell 2.9%, with AstraZeneca (AZN.L) and GlaxoSmithKline (GSK.L) among the worst performers.

Avast Plc (AVST.L) jumped 18.1% and was the top gainer on the FTSE 100 after revealing it was in advanced talks over a merger with peer NortonLifeLock Inc (NLOK.O). read more

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Bank of England Governor Andrew Bailey said the central bank would assess inflation data for things that could be temporary before taking a call on raising rates, while a roaring jobs market in June also showed growing inflation pressures from rising wages. read more

The BoE could also stop its government bond purchases early due to an unexpectedly sharp rise in inflation, interest rate-setter Michael Saunders said, the second top BoE official in two days to signal a possible reining in of its stimulus. read more

"There are a couple of central banks including the Bank of England where the narrative has shifted with noises starting around ending the measures. They are slowly prepping the markets before dropping the support as inflation figures are out of control," said Keith Temperton, equity sales trader at Forte Securities.

The FTSE 100 has gained 8.5% so far this year helped by record low interest rates, but a rise in inflationary pressures coupled with risks arising from a jump in local coronavirus infections have slowed the rise of the blue-chip index, leading it to underperform its wider European peers.

Energy sector (.FTNMX601010) dropped 2.5%, with oil majors Royal Dutch Shell (RDSa.L) and BP (BP.L) down 2.4% and 2.9%, respectively.

The mid-cap FTSE 250 index (.FTMC) fell 1.0% as fears over rising inflation and a jump in virus cases affected the more domestically focused stocks.

Among stocks, the world's largest credit data company Experian (EXPN.L) was the top boost to the FTSE 100, up 2.8%, after it raised its annual outlook and posted a 31% jump in its first-quarter revenue.

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Reporting by Shashank Nayar and Amal S in Bengaluru; editing by Vinay Dwivedi

Our Standards: The Thomson Reuters Trust Principles.

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