Banks, drugmakers pull FTSE 100 higher

By David Brett

LONDON (BestGrowthStock) – Banks helped lift Britain’s top shares higher on Tuesday, after European peers posted robust second-quarter results, bolstered by support from drugmakers as AstraZeneca (AZN.L: ) rose on hopes for its heart drug Brilinta.

By 4:08 a.m. ET, the FTSE 100 (.FTSE: ) index was up 34.15 points, or 0.6 percent at 5,385.27, having closed up 0.7 percent at 5,351.12 on Monday, its highest closing level since May 13.

Banks were the top performers boosted by second-quarter results from European peers Deutsche Bank (DBKGn.DE: ) and UBS (UBSN.VX: ), and with investors still on a high after the European bank stress tests published late on Friday unearthed no nasty surprises.

Lloyds Banking Group (LLOY.L: ), Barclays (BARC.L: ) and Royal Bank of Scotland (RBS.L: ) were up between 2.7 and 4.8 percent.

Drugmaker AstraZeneca (AZN.L: ) rose 3 percent as U.S. Food and Drug Administration documents, released ahead of a July 28 advisory panel, raised hopes for its experimental blood thinner Brilinta. AstraZeneca posts second-quarter results on Thursday.

The bullish sentiment spread to peers GlaxoSmithKline (GSK.L: ) and Shire (SHP.L: ), each gaining 0.8 percent.

The early performance of London’s blue chips echoed a strong finish on Wall Street last night, and overnight gains in most of Asia, which came after encouraging U.S. new home sales numbers, coupled with an upbeat outlook from FedEx (FDX.N: ).

“The second quarter reporting season in the U.S. continues to come down on the side of beats rather than misses, which is obviously helpful,” said Richard Hunter, head of UK equities at Hargreaves Lansdown.

He noted the FTSE 100 is around 30 points shy of breaking even for the year — at 5,412.88 — and said, “given what the market has had to contend with over the last few months that is a reasonably robust performance”.

Miners were gainers as investor appetite for risk returned, with BHP Billiton (BLT.L: ) and Johnson Matthey (JMAT.L: ) the top performers in the sector up 1.4 and 0.8 percent respectively.

Xstrata (XTA.L: ) rose 1.1 percent, ahead of financial results next week, as it posted a 3 percent fall in first half copper output and flat coal production.

Meanwhile, African Barrick Gold (ABG) (ABGL.L: ), which floated in London earlier this year, fell 0.6 percent after it cut its full-year production guidance due to delays in accessing higher grade from its new Buzwagi mine in Tanzania.

OIL SLIDE

Energy shares were the biggest weight on the downside as the sector retreated in tandem with crude which edged back from recent 11-week highs, and ahead of U.S. oil inventory data due in the next two days.

Royal Dutch Shell (RDSa.L: ) and BG Group (BG.L: ) shed 0.2 and 0.4 percent respectively.

BP (BP.L: ) was flat after it said it would take a charge as a result of the Gulf of Mexico oil spill amounting to $32.2 billion, driving the firm to a second quarter loss of $16.97 billion.

It also confirmed Tony Hayward will step down as head of the oil giant on October 1 and be replaced by Robert Dudley, the U.S. executive managing BP’s response to the spill in the Gulf of Mexico.

Elsewhere, Intercontinental Hotels (IHG.L: ) fell 5 percent on trader talk of a placing of 29.9 million shares at between 1,120-1,130 pence each by BarCap.

Hotels peer Whitbread (WTB.L. shed 1.76 percent, and other defensively-perceived stocks also declined, with contract caterer Compass Group ) down 1.4 percent, and consumer products firm Unilever (ULVR.L: ) off 1.1 percent.

On the macro economic front, July’s CBI distributives trade report should be of interest at 1000 GMT, with a reading of zero forecast, up from -5 in June.

Stock Market Report

(Editing by Mike Nesbit)

Banks, drugmakers pull FTSE 100 higher