London stocks set for second week of declines; Legal & General weighs
British equities were little changed on Friday as gains in pharma and biotech shares were offset by a drop in chemicals and life insurance shares, while higher yields weighed on market sentiment.
The blue-chip FTSE 100 was flat by 0922 GMT, while the midcap FTSE 250 slipped 0.1%. Both indexes are on track for second consecutive week of declines.
The yield on the British 10-year benchmark note climbed to its highest level in over two months tracking its European peers, putting further pressure on equities.
Shares of Legal & General dropped 2.8% to the bottom of the FTSE 100, following a cut in price target by Citigroup. The broader life insurance index shed 1.6%, leading sectoral declines.
“Legal & General solvency remains strong but with the new CEO fresh in the seat, we see the likelihood of upside surprises from additional capital return as low at this point,” Citigroup note stated.
The chemicals index lost 1.4% after shares in Victrex (LON:VCTX) dropped 1.9% following the specialty chemicals maker’s fall in first-quarter revenue.
With a 0.9% rise, pharma and biotech shares were among top sectoral gainers, after dropping more than 4.4% in the previous session over weak earnings report from drugmaker AstraZeneca (NASDAQ:AZN).
In corporate news, Tesco (LON:TSCO) would sell most of its banking operations to lender Barclays (LON:BARC) for up to 700 million pounds ($883 million). Shares in Britain’s biggest retailer advanced 0.8%, while Barclays slipped 1.3%.
Motor finance firm S&U was the top decliner on FTSE smallcap index, down 7.6%, after annual profit forecast came below market estimates.
Meanwhile, Bank of England policymaker Jonathan Haskel, who voted to raise interest rates last week, said he is encouraged by signs that Britain’s inflation pressures might be on the wane but needs more evidence of a cool-down.