Bes Stocks To Buy 2014, Best Stocks For 2014: U.K. Stocks Decline as Glaxo Retreats After Drug Trial; Barclays Sinks

Friday, January 27, 2012

U.K. Stocks Decline as Glaxo Retreats After Drug Trial; Barclays Sinks

U.K. stocks (UKX) dropped for the thirdtime in four days as banks declined and GlaxoSmithKline Plcretreated after a disappointing study on an experimentalrespiratory drug.

Glaxo, which accounts for 5 percent of the FTSE 100 Index��sweighting (UKX), sank the most in three years after saying Relovairdidn��t prove superior to an existing medicine in a late-stagestudy. Barclays Plc (BARC), the U.K.��s second-largest bank by assets,slid 4.5 percent.

The FTSE 100 fell 37.42, or 0.7 percent, to 5,612.26 at theclose of trading in London, after earlier rising as much as 0.4percent. The gauge has still advanced 0.7 percent so far thisyear after a 5.6 percent drop in 2011. The broader FTSE All-Share Index slid 0.6 percent today, while Ireland��s ISEQ Indexincreased 1.4 percent.

German Chancellor Angela Merkel and French PresidentNicolas Sarkozy outlined the increased pace of their response tothe financial crisis at a press conference today. Euro-arealeaders may complete their new budget rulebook by Jan. 30, onemonth ahead of schedule, and are considering acceleratingcapital contributions to the bailout fund being set up this yearto stem the debt crisis, Merkel said

��The press conference didn��t produce anything of muchsubstance,�� Chris Beauchamp, a market analyst at IG Index inLondon, said by telephone. ��It was a grand non-event.��

Debt Crisis

The FTSE 100 fell 5.6 percent last year, at one stagelosing as much as 19 percent from the year��s high, as Europeanleaders struggled to contain the sovereign-debt crisis andassure the euro��s survival. The euro area is the U.K.��s largestexport partner.

Germany sold six-month treasury bills at a negative yieldfor the first time today amid demand for the debt securities ofEurope��s biggest economy as a haven from the debt crisis. TheEuropean Central Bank said overnight deposits from commercialbanks rose to a record 463.6 billion euros ($591 billion) onJan. 6, the most since the euro was introduced in 1999.

��Bank! s would rather pay the ECB to hold their cash ratherthan lend it to each other,�� Ben Critchley, a sales trader atIG Index in London, wrote in e-mailed comments. ��Fund managersand other institutions are so desperate for a safe haven thatthey��d rather pay Berlin to borrow money than purchase otherassets. None of this means Armageddon is on its way, but it��snot exactly an encouraging sign.��

Glaxo (GSK) Slides

Glaxo dropped 4.1 percent to 1,435 pence, the largestdecline since January 2009. The U.K.��s biggest drugmaker saidthere was ��no statistical difference�� between Relovair andGlaxo��s Seretide, known as Advair in the U.S., in a 12-weekstudy. Glaxo developed Relovair as a successor to Advair, itsbest-selling drug.

Barclays Plc slid 4.5 percent to 178.1 pence, the lowestlevel this year. Lloyds banking Group Plc declined 3.4 percentto 26.19 pence.

Antofagasta Plc (ANTO) retreated 2.8 percent to 1,234 pence afterCitigroup Inc. lowered its recommendation for the copperproducer to ��sell�� from ��neutral,�� while Deutsche Bank AGcut its rating to ��hold�� from ��buy.��

Heritage Oil Plc (HOIL) dropped 5.7 percent to 182.4 pence, thelargest decline since October, as RBC Capital Markets downgradedthe oil explorer to ��underperform�� from ��sector perform.��

InterContinental Hotels Group Plc (IHG) climbed 1.8 percent to1,195 pence as Deutsche Bank upgraded the hotelier��s shares to��buy�� from ��hold.��

Persimmon Plc (PSN) rallied 5.3 percent to 506.5 pence after theU.K.��s second-biggest homebuilder said 2011 results will betoward the top end of analysts�� estimates. The company saidunderlying operating margin will approach 10 percent andforecast a 50 percent increase in pretax profit.

Related Articles: