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AstraZeneca, commodity stocks drag down UK's FTSE 100

AstraZeneca drags down UK's FTSE 100
AstraZeneca drags down UK's FTSE 100   -   Copyright  Thomson Reuters 2021
By Reuters

By Bansari Mayur Kamdar

– UK’s FTSE 100 index fell on Friday, dragged lower by drugmaker AstraZeneca following its profit miss, while commodity-linked stocks slipped as a stronger dollar dented metal and oil prices.

The blue-chip FTSE 100 index ended 0.5% lower, weighed by AstraZeneca after the COVID-19 vaccine maker reported a smaller-than-expected quarterly profit and stuck with its overall profit forecast for the year.

“Such guidance from the leading vaccine provider, at a time when nations are already inoculating vulnerable patients with a booster dose, certainly charts a gloomy path for profitability in upcoming quarters,” said Kunal Sawhney, CEO of Kalkine group.

A 2.6% drop in mining stocks and 1.2% slide in energy stocks also dragged down the commodity-heavy FTSE 100 index as a stronger dollar weighed on commodity prices on bets of an earlier-than-expected interest rate.

However, the surge in mining stocks earlier in the week put the FTSE 100 on track for its third consecutive week of gains.

Bogged down by inflationary pressures and supply chain problems, UK blue-chip shares continue to underperform their European peers. The FTSE 100 has gained just 13.9% this year compared to the 21.7% increase in the pan-European STOXX 600 index.

According to a latest Chambers of Commerce survey, 80% of businesses are feeling the effects from price increases in the UK, adding to fears of inflation in the market, Bloomberg News reported.

In a bright spot, there were reports suggesting Britain wanted to de-escalate tensions with the European Union and renew efforts to find a solution over a Northern Ireland trade dispute.

The domestically-focussed mid-cap index ended flat with financials and consumer discretionary stocks among the worst performers.

Online trading platform IG Group slipped 1.4% after completion of a comprehensive refinancing of its debt, providing it with additional financial flexibility to grow.

Graphic: Miners have outperformed the FTSE 100 for the first week in four weeks backed by a weak pound and some relief on China