Pharma companies are among UK share prices to have climbed this Thursday, with investors looking for defensives amid US-China trade worries and Brexit uncertainty. Intertek (LON:ITRK) meanwhile is underperforming the broader market selloff following its trading statement.
Defensive stocks rise on Thursday
Pharma stocks are in charge this Thursday, with investors flocking to defensive shares in the face of economic and political uncertainty. AstraZeneca (LON:AZN) is currently the FTSE 100’s biggest riser in percentage terms, with the shares changing hands about 1.6 percent higher in early afternoon trade, compared with about a 1.3-percent slump in the Footsie. NMC Health (LON:NMC) is about 1.10 percent up, while GlaxoSmithKline (LON:GSK) is outperforming the market with about a 0.5-percent gain.
Investors have been on edge this week after the US moved to place China’s Huawei on a trade blacklist last week, adding to the ongoing concerns over the strained trade relations between Washington and Beijing.
“Without a clear way forward during an intensifying 2020 US presidential election, we see a rising risk that tariffs will remain in effect through end 2020,” analysts at Nomura warned in a note, as quoted by Reuters.
At home, political worries are further pressuring UK shares amid prospects for Prime Minister Theresa May to quit. The BBC reported yesterday that Commons Leader Andrea Leadsom had quit the cabinet, saying she no longer believes the government’s approach will deliver Brexit.
“The risk of a hard-Brexit replacement for May has increased the risks of a hard Brexit result or even a forced no-deal exit,” Westpac macro strategist Tim Riddell commented, as quoted by Reuters. “Such an event would likely force GBP lower, increase risks of assets sliding and BOE (Bank of England) taking counter action to support assets.”
In individual UK share prices to watch, Intertek has been a prominent faller even as it reported a 5.3-percent rise in revenue for the four-month period until April 30. The support services group further pointed out that it was on track to deliver its full-year revenue, margin and cash targets. Proactive Investors, however, quoted analysts at UBS as commenting that organic growth had slowed slightly and that products ‘may be a cause for concern’ even if comparatives get easier through the rest of the year. Intertek’s share price is currently standing about two percent lower.
United Utilities (LON:UU) is also underperforming the market as it posted its full-year results, reporting that its reported operating profit had inched lower to £634.9 million, from £636.4 million in the prior-year period. The company’s underlying operating profit, however, rose to £363.4 million, from £645.1 million a year ago. The water utility’s chief executive officer Steve Mogford reassured investors that the company was “well placed for the remainder of the current regulatory period and beyond”. Shares in United Utilities are some 2.5 percent worse off in early afternoon trade.
In mid-caps, the previous session’s winner Royal Mail Group (LON:RMG) has remained among this week’s UK share prices to watch, having lost ground this Thursday, in the wake of yesterday’s full-year results and strategy update. Nicholas Hyett at Hargreaves Lansdown commented after the results that against the background of disagreement with trade unions, struggling letters business and rising costs at its GLS business, it was no surprise that the postal operator’s chief executive Rico Back had decided that drastic action was needed. The analyst, however, noted that this came at a price, and “the first casualty has been the dividend”. Royal Mail’s share price is more than nine percent in the red, compared with about a 1.2-percent fall in the mid-cap FTSE 250 index.
Shares in Merlin Entertainments (LON:MERL) meanwhile are rallying as an activist investor urged the company to pursue a deal to go private. Reuters reported today that hedge fund ValueAct had said in an open letter to the Legoland operator that the level of investment needed by the company meant that it would be better off with a return to private ownership. Merlin’s shares have added more than six percent to their value intraday.
UK share prices to watch on Friday
Following this week’s string of earnings, including Marks and Spencer Group (LON:MKS), tomorrow promises to be quieter with no scheduled corporate updates.
Retailers, however, are likely to provide some excitement on Friday, with UK retail sales data for April due out at 09:30 BST. IG reports that sales are forecast to have climbed 4.1 percent year-on-year, but to have fallen by 0.6 percent as compared with the previous month.
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