The healthcare sector pulled the FTSE 100 down as AstraZeneca was marked lower on reports it had approached Gilead Sciences about a possible merger.
Investors are unlikely to welcome a large M&A deal at a time when both companies are trying to fight coronavirus as it could prove to be a distraction to management. The timing seems wrong when both companies have such important work to do,” says Russ Mould, investment director at AJ Bell.
The FTSE 100 dipped 0.5% to 6,450 with AstraZeneca down 2.1% to £82.46. Also weighing on the index was weakness in rival pharma GlaxoSmithKline, down 1.1% to £16.19, and banking group HSBC which saw its shares fall 1.8%.
Asian markets fared better than the UK and Europe with Japan’s Nikkei 225 up 1.4% and India’s S&P BSE Sensex rising by 0.5%. However, Hong Kong’s Hang Seng index was flat, and Shanghai’s SSE Composite only managed a 0.2% gain, with markets overall struggling to sustain recent optimism as new trade data disappointed.
China’s exports fell 3.3% in May year-on-year while imports fell 16.7%, implying that consumption is still weak and the country’s recovery efforts from the pandemic are still somewhat fragile.