Smith & Nephew (LON:SN) and AstraZeneca (LON:AZN) have been among today’s UK share prices to watch, outperforming the broader London market, with trade concerns weighing on market sentiment around the world. Tomorrow meanwhile is expected to bring more focus on London-listed housebuilders with investors eyeing the latest construction data out of the UK, which will come hot on the heels of a downbeat manufacturing reading.
S&N and AstraZeneca rise
Smith & Nephew has been one of the few green spots in the benchmark FTSE 100 index on the first trading day of June as it reported that it had wrapped up the acquisition of the Brainlab orthopaedic joint reconstruction business for an undisclosed amount. The artificial hips and knees maker said that the deal supported its strategy to invest in technologies which further its digital surgery and robotic ecosystem. Smith & Nephew’s share price has added about 0.12 percent in early afternoon trade, outperforming the benchmark FTSE 100 index which stands about 0.4 percent lower, trimming some of its earlier losses.
An upbeat outcome from a clinical trial meanwhile has helped lift AstraZeneca’s shares, even as the company reported that the results from a late-stage trial had showed that its oncology treatment Lynparza had nearly doubled the time patients lived without disease progression from germline BRCA-mutated metastatic pancreatic cancer. The update nevertheless marks good news for the blue-chip pharmco which has bet on oncology as one if its key therapy areas to fuel future growth. AstraZeneca’s shares are changing hands about 0.4 percent higher.
In blue-chip fallers, Ocado (LON:OCDO) is in the doldrums, as Jefferies trimmed its rating on the shares. Reuters quoted the broker as commenting that the online grocer’s fixed central costs, high capex and limited sales fee income could lead to significant cash outflows. Ocado’s shares are down by more than three percent this Monday.
In smaller London-listed companies, builder Kier Group (LON:KIE) has tanked nearly forty percent after the company cautioned that it expects its underlying operating profit for FY2019 to be about £25-million lower than in the prior-year period, amid pressures within its Highways, Utilities and Housing Maintenance businesses, and with revenue growth in its Buildings division expected to be lower than previously forecast.
“The spectre of collapsed outsourcer Carillion means when a rival or peer unveils a profit warning it generally carries greater weight,” said AJ Bell investment director Russ Mould, as quoted by Proactive Investors, adding that while operating profit will be lower than previous expectations, “perhaps more significant” is the revelation that the company will no longer escape a net debt position by its year end on June 30. Kier’s shares have given up some 38 percent intraday.
Broader market sentiment subdued
With little to focus on on the corporate front today, investors continue to digest trade tensions in the wake of US President Donald Trump’s surprise announcement last week about tariffs on Mexico, which would come on top of Washington’s strained trade relations with Beijing.
“The trade war is not cooling down. In fact, it looks like the rhetoric is heating up and further escalation seems likely,” said Markets.com analyst Neil Wilson, as quoted by Reuters. The newswire notes that China warned the US over the weekend not to meddle in security disputes over Taiwan and the South China Sea.
At home, the latest IHS Markit/CIPS UK manufacturing purchasing managers’ index (PMI) pointed to contraction last month, slipping to 49.4, from 53.1 in April, and falling below the neutral 50.0 benchmark for the first time since July 2016.
“The UK manufacturing sector was buffeted by ongoing Brexit uncertainty again in May,” Rob Dobson, Director at IHS Markit, which compiles the survey, commented in a press release. Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, added that “with one of the fastest shrinking rates seen in six and a half years and the biggest drop since July 2016, straight after the referendum result, based on this result, there is the likelihood of more bad news to come”.
UK share prices to watch on Tuesday
Tomorrow’s UK share prices to watch are likely to include London-listed housebuilders, with the nation’s construction PMI for May set to be released at 09:30 BST. IG reports that the index has expected to have inched lower last month, from 50.5 to 50.2, while remaining in expansion territory. There are no blue-chips reporting tomorrow, while among smaller London-listed companies, online electrical goods retailer AO World (LON:AO) is scheduled to post its fourth-quarter trading statement tomorrow.