FTSE 100 close: London dragged lower by Astrazeneca, DS Smith soars after takeover rumours
Shares in Astrazeneca, the biggest company listed in London, dropped 6.3 per cent even after reporting an increase in revenue in 2023.
London’s blue-chip FTSE 100 was trading lower around midday, having opened in the green, as investors digested a slew of updates from some of the capital’s largest firms.
The FTSE 100 closed down 0.44 per cent at 7,595.48 while the FTSE 250, which is more aligned with the health of the domestic economy, dipped 0.09 per cent to 19,102.72.
A number of listed firms released updates this morning giving investors a lot to concentrate on, but it was Astrazeneca results which determined the fate of the market.
Shares in Astrazeneca, the biggest company listed on London Stock Exchange, closed 6.4 per cent even after reporting a six per cent increase in revenue in 2023.
Investors were disappointed by the lower than expected increase in core operating profit.
“The company issued strong guidance for growth in 2024 and its revenue numbers were solid, but there were some red flags for investors, including rising costs and softer-than-expected margins,” Mark Crouch, analyst at investment platform eToro said.
Although the premier index was trading lower, shares in DS Smith were up nearly 12 per cent following rumours that it could be subject to a takeover bid from rival Mondi.
The company updated markets this morning saying it “notes the recent media speculation and confirms that it has received a highly preliminary expression of interest” from a “combination” firms.
Shares in British American Tobacco also rose strongly despite reporting a £15.7bn loss in 2023.
The big loss stemmed from impairments on its American business, but investors were impressed that the firm managed to hit profitability in its ‘new categories’ division, which includes its vaping products, two years ahead of schedule.
Its shares were up over seven per cent.
Unilever shares also rose strongly after the firm announced a €1.5bn buyback. Its shares were up 3.2 per cent.
Underlying operating profit at Unilever increased 2.6 per cent in the year with the firm expecting sales growth of between 3-5 per cent in 2024.
But Matt Britzman, equity analyst at Hargreaves Lansdown, said “there’s still a long way to go before Unilever’s refreshed leadership team can call mission complete on the turnaround”.
The firm warned that less than four in ten of its brands were currently claiming market share with cheif Hein Schumacher flagging “disappointing” competitiveness.
