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Top flight index stays in the red as drugs firms come under fire

Published 25/08/2016

The FTSE 100 index was down 18.88 points to 6816.9
The FTSE 100 index was down 18.88 points to 6816.9

London's top flight index remained in the red as drugs firms came under fire when US presidential nominee Hillary Clinton took a swipe at the pharmaceutical industry.

The FTSE 100 index was down 18.88 points to 6816.9 after Mrs Clinton hit out at the 480% price hike of an allergy product owned by US pharma company Mylan .

She said it was "wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them".

The comments from across the Atlantic caused investors to take flight from London-listed drug stocks, with Hikma Pharmaceuticals and Shire dropping 78p to 2150p and 123p to 4902p respectively, while AstraZeneca was off 69p to 5011p.

Mining giant Glencore continued its dismal performance from the previous session when investors baulked at the size of its debt pile.

Shares were 4.8p lower at 179.3p, after its net loss fell from 676 million US dollars (£511 million) to 369 million US dollars (£279 million) in the half-year period.

Net debt also fell, but still stands at 23.6 billion US dollars (£17.8 billion).

Across Europe, Germany's Dax closed down 0.8% and the Cac 40 in France was 0.6% lower.

The price of oil rallied back from a sell-off in the previous session to trade up 0.7% to 49.37 US dollars a barrel.

Brent crude lifted amid expectations that the US dollar would take a tumble before US Federal Reserve chairwoman Janet Yellen delivers her speech at the Jackson Hole symposium on Friday.

On the currency markets, the pound was down 0.3% against the dollar at 1.318 US dollars and 0.4% against the euro at 1.168 euros.

The euro notched up against the pound after shrugging off disappointing economic data from Germany.

Business confidence in Europe's biggest economy took an unexpected tumble amid growing concerns over Britain's vote to leave the European Union.

The Ifo Institute's confidence index fell to 106.2 points for August from 108.3 in July. Economists had predicted a slight increase to 108.5.

In UK stocks, shares in Entertainment One plunged more than 14% after broadcaster ITV gave up its takeover pursuit of the Peppa Pig-owner.

Shares were down 35.7p to 215.1p after the broadcaster said on Thursday that it has withdrawn its proposal to take over the Canada-based firm after Entertainment One rejected an initial offer earlier this month.

Entertainment One had previously "unanimously rejected" a 236p-a-share proposal as it believes it "fundamentally undervalues" the group.

ITV said it will continue with its strategy to "build a stronger, more diversified international business".

Sports Direct was in the doldrums as pressure continued to mount on the retailer ahead of its annual general meeting on September 7.

Shareholder group The Investor Forum has urged Sports Direct to "undertake a wide-reaching independent review of the entire governance practices at the company" after its billionaire founder Mike Ashley took a grilling from MPs over working conditions in June.

Mr Ashley told MPs from the Business Select Committee that staff were not paid during security searches at the end of their shift, meaning they took home less than the minimum amount required by law.

Sports Direct has said the findings of a separate review carried out by RPC would be published in the week beginning September 5 and it would conduct a review of its board of directors by next April.

Shares were down more than 1% or 4.7p to 305.3p.

The biggest risers on the FTSE 100 Index were CRH up 71p to 2540p, Marks and Spencer up 8.9p to 346.9p, Sky up 14p to 873p, Ashtead Group up 17p to 1257p.

The biggest fallers were Hikma Pharmaceuticals down 78p to 2150p, Dixons Carphone down 12.7p and 374.3p, Hammerson down 16.5p to 574p, Taylor Wimpey down 4.4p to 164.1p.

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