FTSE dragged into red by sterling jump and AstraZeneca shares dip
The FTSE 100 edged into the red on Thursday, dragged down by a jump in sterling and a drop in AstraZeneca shares following rumours of its chief executive's departure.
London's blue chip index ended the day nearly flat, down 3.49 points at 7,413.44.
AstraZeneca shares weighed on the FTSE 100, falling 179p to 5,013p amid rumours that the pharmaceutical giant's chief executive Pascal Soriot was leaving the company to join Israeli drug firm Teva Pharmaceutical Industries.
AstraZeneca said it did not comment on market rumour or speculation.
The index was also knocked by a stronger pound, which rose 0.2% versus the US dollar to 1.291, and 0.5% against the euro to 1.134, after Bank of England Monetary Policy Committee member Ian McCafferty signalled he would continue to push for an interest rate hike.
David Madden, a market analyst at CMC Markets UK, said: "Mr McCafferty has a track record of being a hawk ... The UK central bank appears to be divided over its monetary policy, and while there is division the pound will remain volatile.
"The hawks are in a minority at British central bank, but the to-ing and fro-ing will keep traders on their toes."
Investors were also digesting a report from the Office for Budget Responsibility (OBR) which warned that the potential Brexit blow to productivity growth could put a £36 billion dent in the Treasury's coffers and leave the economy nearly £100 billion worse off overall.
Across Europe, the French Cac 40 rose 0.2% while the German Dax was up 0.1%.
In oil markets, Brent crude prices jumped 1.6% to around 48.46 US dollars per barrel after oil import data pointed to higher crude demand in China.
In UK stocks, BT Group shares jumped 11.5p to 301.6p, making it the biggest riser on the FTSE 100. It comes after the company inked an agreement to roll out 100 EE concessions in Sainsbury's and Argos stores by 2019.
Burberry shares rose 39p to 1,669p, as investors continued to celebrate news of a 4% rise in like-for-like sales in the first quarter.
Game Digital jumped 0.75p to 25p after Mike Ashley's Sports Direct picked up a 26% stake in the company, while Asos shares fell 51p to 5,759p despite reporting a 32% rise in total sales in the four months to June 30, driven by strong growth in the US and Europe.
GoAhead climbed 25p to 1,752p, shrugging off news of a Government order for Southern Railway to pay for a £13.4 million package of improvements which will include funding 50 on-board supervisors and projects to benefit passengers.
The biggest risers on the FTSE 100 were BT Group up 11.5p to 301.6p, Marks and Spencer Group up 10.8p to 327p, Taylor Wimpey up 5.9p to 183.2p, and Burberry Group up 39p to 1,669p.
The biggest fallers on the FTSE 100 were AstraZeneca down 179p to 5,013p, Shire down 95p to 4,175p, Sky down 20.5p to 975p, and Randgold Resources down 105p to 6,780p.