The UK stock market edged upwards this week while US shares stormed ahead to hit new highs. The week started badly for tobacco shares as investors digested the previous Friday’s announcement by the US Food and Drug Administration (FDA) that it plans to reduce the amount of nicotine in cigarettes. Imperial Brands hit a two-year low and there was heavy selling of British American Tobacco.
There was better news from the FDA for Astrazeneca, the pharmaceuticals company, whose shares slumped 15 per cent the previous week after trials of a lung cancer drug fell flat. On Monday the FDA approved the use of Imfinzi, Astrazeneca’s immunotherapy drug, for the treatment of non-metastatic lung cancer. Astrazeneca’s shares clawed back some of the ground lost last week.
BP pleased the market on Tuesday with a better than expected set of second-quarter results, sending the shares up more than 2 per cent on the day. Bob Dudley, BP’s chief executive, said that the company was adjusting to the “new oil price environment” and was assuming prices that would remain at about $50 a barrel for the next five years.
Meanwhile, the sharks were circling round Carillion, the construction company, whose shares lost three quarters of their value after a shock profits warning last month. Analysts queued to cut their target price for the company and Carillion shares fell a further 6 per cent. Purplebricks, the online estate agency, whose largest shareholder is the fund manager Neil Woodford, suffered a sharp fall in its share price in midweek after a report on the BBC’s Watchdog programme that it had used a banned claim in its marketing material.
The Dow Jones Industrial Average broke through 22,000 for the first time, buoyed by better than expected quarterly results from Apple, which itself hit a record high. US shares continued the upbeat mood on Thursday, recording the seventh record close, while UK stocks were also in good form. The FTSE 100 index of leading shares closed yesterday at 7,511.