Britain’s top share steadied in late trading on Thursday after surrendering earlier gains, with RSA leading insurers lower on weak premiums and drugmaker GlaxoSmithKline slipping after trading without the attraction of its latest dividend.
RSA fell 3.7 percent, the top faller in the blue-chip FTSE 100 index, after saying premiums had fallen this year because of soft markets and its focus on areas offering higher returns. Insurer Admiral dropped 2.6 percent.
The FTSE 100 was up 0.08 percent at 6,544.28 points by 1557 GMT, after rising up to 6,580.21 on European Central Bank President Mario Draghi’s comments that the governing Council was unanimous in its commitment to use additional unconventional instruments within its mandate as risks to the recovery remained skewed to the downside.
“Draghi’s comments on the ECB’s preparedness to stimulate the economy helped the market to climb higher initially, but some of those gains evaporated due to the lack of concrete details,” Tom Robertson, senior trader at Accendo Markets.
“However, his comments have reassured investors as the strategy has worked for the U.S. economy, which is back on track after the financial crisis.”
Weaker drugmakers also weighed on the index. Britain’s top drugmaker GlaxoSmithKline fell 2 percent, wiping 5.5 points off the blue-chip FTSE 100 index, of which about two-thirds of the points were lost because the stock went ex-dividend.
Glaxo was the biggest decliner in the UK pharmaceutical and biotechnology index, which fell 1.2 percent.
AstraZeneca, which saw off a $118 billion takeover bid from Pfizer in May, fell 1 percent after announcing third-quarter results. It raised 2014 sales forecast but some traders said its results would have needed to be quite dramatic to have boosted its shares.
“(AstraZeneca’s) third-quarter earnings per share have fallen, with investment into potential new blockbuster drugs still ongoing. Revenues in Europe have retreated, whilst the resumption of a progressive dividend policy has yet to be made,” Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, said.
However, the market was underpinned by a rally in retail stocks. The FTSE 350 food and drug retailers index rose 3.8 percent, boosted by a 5.9 percent jump in WM Morrisons after Britain’s No. 4 grocer reassured over its full-year outlook despite missing sales forecasts.
The stock remains down nearly 35 percent for the year, with traders saying that it was attractively valued, and any good news was likely to be seized upon.
“They were a miss but forward guidance looks pretty decent. On a valuation basis excluding any spinning off of property assets, they remain good value over the medium term,” Atif Latif, director of trading at Guardian Stockbrokers, said.
“If we can see evidence of stability and … increasing market share versus Lidl and Aldi, we still see upside price action from here.”
Fellow supermarkets Tesco and Sainsbury, which also have suffered from price competition with low-cost alternatives, rose 3.5 percent and 5.9 percent respectively.
Sainsbury’s showed off its answer to discounters Aldi and Lidl on Thursday with the opening of its first Netto-branded store, tasked to win over thrifty shoppers.
Marks & Spencer rose 6 percent, benefiting from a spate of upgrades from brokers and banks such as Goldman Sachs, UBS and Citigroup, building on a 9.7 percent rise on Wednesday after its own encouraging results.