Investor Alert

London Markets

May 18, 2018, 12:37 p.m. EDT

U.K. stocks fall from record as AstraZeneca, mining stocks decline

FTSE 100 on track for longest weekly win run since 2005

By Sara Sjolin, MarketWatch

AstraZeneca shares are losing ground Friday.

U.K. stocks ended lower on Friday, pulling back from the previous session’s record close, as shares of AstraZeneca declined following the heavyweight drugmaker’s earnings report, and as shares in mining companies skidded in the wake of a selloff in metals prices.

What are markets doing?

The FTSE 100 index (FTSE:UK:UKX)  dropped 0.1% to close at 7,778.79, breaking a three-day winning streak. On Thursday, the London benchmark ended at an all-time closing high, boosted by a weaker pound and a rally in oil stocks.

For the week, the FTSE 100 scored a 0.7% gain, marking an eighth straight weekly advance. That is its longest weekly winning run since July 2005, when the index also rose for eight consecutive weeks.

The pound (XTUP:GBPUSD)  on Friday fell to $1.3475 from $1.3516 late Thursday in New York.

What is driving the market?

U.K. investors paused for breath after pushing the blue-chip index to a record on Thursday. They also monitored geopolitical risks and the latest developments in the Brexit discussions.

On the Brexit front, U.K. Prime Minister Theresa May denied reports earlier this week that Britain was looking to stay in the EU customs union after Brexit. Instead, her cabinet agreed to a “backstop” proposal that would align the U.K. with EU tariffs after 2020 to avoid a hard border with Ireland. The backstop plan would only be needed if the U.K. was unable to agree on a separate customs deal with the EU, which would raise prospect of a hard border in Ireland, according to the BBC .

On the global scene, U.S. President Donald Trump raised concerns about prospects for a trade deal between the U.S. and China. At a press conference on Thursday, Trump said he doubts that the negotiations will succeed because “China has become very spoiled” on trade.

With no major economic reports on deck in the U.K. on Friday, traders instead focused on the latest corporate news.

Aside from financial markets, the royal wedding between Prince Harry and Meghan Markle also grabbed attention in the U.K. The couple will get married on Saturday in Windsor.

Read: Prince Charles to walk Meghan Markle down the aisle for royal wedding

Read: Royal wedding’s $1.4 billion economic impact: Here’s the boost by sector

What are strategists saying?

“The pound was trading lower versus the dollar once again on Friday, as it heads towards fresh 5-month lows. Whilst a run of soft U.K. economic data, a dovish [Bank of England] and growing concerns over the future health of the U.K. labor market has been weighing on demand for the pound over the past month, the negative sentiment intensified this week by the return of Brexit fears and an ever-stronger U.S. dollar,” said Fiona Cincotta, senior market analyst at CityIndex, in a note.

“With the U.K. economic calendar quiet for the first part of next week, investors will need to wait until Wednesday’s inflation data for any hope of a meaningful change in direction for the battered pound,” she added.

Stock movers

Shares of AstraZeneca PLC (LON:UK:AZN)   (NAS:AZN) dropped 2% after the pharma giant reported core earnings that missed forecasts. Core operating profit — the company’s preferred measure, which strips out one-time gains and impairments — fell to $896 million from $1.67 billion a year ago.

Glencore PLC (LON:UK:GLEN)   (OTC:GLCNF)  fell 4.4% after Bloomberg reported that the miner may face a formal bribery investigation over its business conduct in Congo.

Other miners also fell, with shares of BHP Billiton PLC   (NYS:BHP)  ending 0.7% lower and Anglo American PLC (LON:UK:AAL)  losing 1.2%.

J Sainsbury PLC (LON:UK:SBRY)  fell 0.6%. The loss came after the U.K. competition watchdog said it is considering investigating the proposed merger between J Sainsbury PLC and Walmart Inc.’s (NYS:WMT)  British arm, Asda Group Ltd.

Outside the FTSE 100, shares of Carpetright PLC  rallied 11% after the floor coverings retailer said it plans to raise £60 million ($80.86 million) in a share issue.

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