London open: FTSE 100 rises as AstraZeneca jumps

28th Apr 2014 08:33

- AstraZeneca jumps as Pfizer confirms interest- Pharma stocks outweigh weakness in basic resource shares- Japanese retail sales surge, but analysts still cautious- BG Group drops after CEO exit, updatetechMARK 2,780.12 +1.17%FTSE 100 6,700.83 +0.23%FTSE 250 15,848.32 -0.25% UK markets edged higher on Monday morning as a surge in the share price of AstraZeneca and gains from other pharmaceutical stocks offset weakness in the resources sector.AstraZeneca was up as much as 15% early on after US pharma giant Pfizer confirmed that it had made a "preliminary, non-binding indication of interest" regarding a possible merger in January. The proposal, rejected by AstraZeneca's board, valued the company at 4,661p a share, around £60bn, a 30% premium to its closing price at the time.The FTSE 100 was trading 0.2% higher at 6,701 in early trading.With little economic data due out today, analysts a Danske Bank said they expect a "quiet start to a very busy week" ahead of the Federal Reserve policy meeting on Wednesday, US ISM manufacturing data on Thursday and the all-important non-farm payrolls figures on Friday."We generally see upside risks to both ISM and non-farm payrolls and for the Fed to taper another $10bn and nod to the latest improvement in data," they said.Stocks in Asia fell overnight despite Japanese retail sales growth coming in at a 17-year high in March. Sales rose at an annual rate of 11% last month, up from 3.6% the month before. However, the figure was in line with analysts' expectations as shoppers rushed to stores ahead of the planned increase in the national sales tax which began at the start of April.Analysts are now concerned that the strong sales growth acceleration in March will lead to a decline in consumer spending in April. "The April number, when released next month, will highlight this perfectly and is likely to be woeful, with spending drying up significantly following the spree in March," said Market Analyst Craig Erlam from Alpari UK.AstraZeneca jumps on potential Pfizer offerAfter Pfizer's initial proposal was rejected and AstraZeneca declined to engage in further talks this month, the US group said it is "currently considering its options". Pfizer said that any potential transaction would offer AstraZeneca's shareholders a "highly compelling opportunity to realise a significant premium" to the recent share price and would include a "substantial" cash payment.Other companies in the pharmaceutical sector were also performing well this morning as a result, including Shire, GlaxoSmithKline and Dechra Pharmaceuticals.Heading the other way was natural gas producer BG Group after delivering a double blow to investors as it announced the departure of Chief Executive Chris Finlayson and warned its 2014 production levels would be at the lower end of expectations due to challenges in Egypt.Sector peers BP and Shell were also in the red, along with mining groups Rio Tinto, BHP Billiton and Glencore Xstrata.Ophir Energy fell after saying that Premier Oil has rejected a merger proposal and it is "no longer considering making an offer". Ophir believed that merging the two companies will provide the "potential to create a well-funded, re-focussed, full-cycle exploration and production company".FTSE 100 - RisersAstraZeneca (AZN) 4,636.50p +13.64%Shire Plc (SHP) 3,271.00p +1.90%British Land Co (BLND) 693.00p +1.76%William Hill (WMH) 345.60p +1.65%Tullow Oil (TLW) 852.00p +1.49%GlaxoSmithKline (GSK) 1,673.00p +1.09%Resolution Ltd. (RSL) 296.90p +0.85%Smith & Nephew (SN.) 922.00p +0.77%Unilever (ULVR) 2,616.00p +0.73%SABMiller (SAB) 3,148.50p +0.56%FTSE 100 - FallersBG Group (BG.) 1,103.50p -3.62%Rio Tinto (RIO) 3,213.00p -2.00%Ashtead Group (AHT) 850.00p -1.51%Anglo American (AAL) 1,514.50p -1.21%G4S (GFS) 239.30p -1.12%BHP Billiton (BLT) 1,903.50p -1.07%Royal Mail (RMG) 514.00p -1.06%Royal Bank of Scotland Group (RBS) 300.00p -1.06%Standard Chartered (STAN) 1,280.50p -1.00%Persimmon (PSN) 1,305.00p -0.99%FTSE 250 - RisersLadbrokes (LAD) 145.00p +4.54%Perform Group (PER) 238.00p +4.39%Worldwide Healthcare Trust (WWH) 1,258.00p +2.53%Mitchells & Butlers (MAB) 446.50p +2.24%Cairn Energy (CNE) 174.60p +2.17%African Barrick Gold (ABG) 258.00p +1.61%Hikma Pharmaceuticals (HIK) 1,563.00p +1.23%Monks Inv Trust (MNKS) 376.50p +1.21%Fidelity European Values (FEV) 1,529.00p +1.12%Drax Group (DRX) 667.00p +0.98%FTSE 250 - FallersRPS Group (RPS) 292.10p -2.60%Spirent Communications (SPT) 98.75p -2.52%Renishaw (RSW) 1,853.00p -2.11%Polymetal International (POLY) 582.50p -1.52%Beazley (BEZ) 244.30p -1.49%Countrywide (CWD) 595.00p -1.49%Tate & Lyle (TATE) 693.50p -1.49%Telecity Group (TCY) 632.50p -1.48%Evraz (EVR) 90.95p -1.46%Smith (DS) (SMDS) 307.90p -1.44%BC