London’s blue-chip index closed down 16 points at 10,472 on Thursday, with geopolitical uncertainty and a pharmaceutical setback weighing heavily on sentiment.
AstraZeneca suffered a dramatic sell-off after its Phase III CARDIO-TTRansform trial of Wainua failed to meet its primary endpoint, finding no statistically significant reduction in cardiovascular deaths and recurrent cardiovascular events versus placebo.
The drug giant’s shares initially plunged as much as 13% at the open before recovering somewhat, ultimately closing down around 8% and wiping approximately £20 billion from its market capitalisation.
Jefferies analyst Michael Leuchten described the trial failure as “surprising”, estimating it put around 2% of AstraZeneca’s net present value at risk, equivalent to approximately $2.5 billion in risk-adjusted sales.
Leuchten warned the shares could fall by twice that amount due to concerns over management credibility, adding that AstraZeneca “is meant to be able to design trials that are mostly water-tight.”
He said the stock “may not recover until the next volatility catalyst, AVANZAR, is out of the way,” suggesting further near-term pressure on the shares.
Citi analysts had previously forecast peak annual sales of more than $6 billion from Wainua, estimating the programme accounted for around 2.8% of AstraZeneca’s total valuation.
At the other end of the leaderboard, Computacenter jumped sharply after the FTSE 100 technology and services provider revealed preliminary first-half adjusted profit before tax is set to roughly double last year’s £81.5 million figure.
Playtech shares surged nearly 17% after the gaming technology firm reported first-half trading ahead of market expectations, with the company guiding for adjusted EBITDA of more than €155 million for the first six months and at least €270 million for the full year.
Peel Hunt analyst Ivor Jones noted the full-year guidance was 20% higher than his forecast, with key drivers including Hard Rock Digital in the US, along with operations in Mexico and Colombia.
IG chief market analyst Chris Beauchamp offered some reassurance on the wider geopolitical backdrop, saying: “While the attacks in the Middle East appeared to intensify overnight, there has been little dramatic rhetoric today, leading to hopes that any renewed conflict can be avoided.”
On Wall Street, semiconductor stocks dominated the session, with Lam Research, Applied Materials and KLA all jumping more than 7%, while Micron climbed over 6% after announcing plans to invest up to $3 billion in the US semiconductor supply chain.
Business Secretary Peter Kyle turned up the pressure on UK pension funds, warning they should invest more in British companies or face legislation forcing them to do so, saying fund managers should feel “a patriotic duty in making Britain a success.”
Kyle, speaking at an event at Lloyds Banking Group’s London headquarters, insisted compulsory investment was not his preferred option but added: “I’ll use it if I have to, because I’m in a rush.”
Separately, GSK confirmed it was walking away from its neuroscience partnership with US biotech Alector after both experimental drugs at the heart of the collaboration failed in clinical trials, formally serving notice to terminate the agreement from January 2027.
In the property sector, Segro chairman Andy Harrison rejected fresh overtures from US logistics giant Prologis, stating: “The board takes its fiduciary duties very seriously, but the value of Prologis’s current, rejected proposal does not reflect any basis for further engagement.”
BP chief executive Meg O’Neill, marking her first 100 days in the role, pledged stricter capital discipline and a simpler business structure, saying the company must make “fewer, better choices and hold ourselves to account.”
The RICS housing survey for June showed a headline price balance of minus 33%, with new buyer enquiries and agreed sales both remaining negative, though RICS head of market analysis Tarrant Parsons said results offered “some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass.”
Looking ahead, next week brings a packed schedule including US bank earnings from JPMorgan, Bank of America, Goldman Sachs and Citigroup, as well as UK results from Ocado, Dunelm and Wise, alongside US inflation and retail sales data.