FTSE falls from record highs with AstraZeneca hit by competition fears

Leading shares have fallen from record highs, hit by a spate of profit taking and renewed uncertainties over the global economy.

Despite signs of progress in the prolonged attempts to solve Greece’s financial problems, the FTSE 100 has fallen 73.11 points to 7030.87. Investors are cautious ahead of the UK election, as well as the US Federal Reserve meeting this week. While no one expects an interest rate rise now or even in June, given the recent weak data, there is still disagreement about when the Fed will sanction dearer borrowing costs. Mike McCudden, head of derivatives at Interactive Investor said:

In early trade investors appear to be treading cautiously ahead of the Fed?s two day meeting despite low expectations of any change to rate policy. With the strength in equities of late, investors are looking for any excuse to lock in some profits and Fed meetings tend to provide a prompt.

UK GDP came in lower than expected, with quarter on quarter growth of 0.3% compared to expectations of 0.5%.

Pharmacautical companies are among the leading fallers, with AstraZeneca down 97p at 4608.5p after US rival Merck’s diabetes drugs met heart-safety requirements in a recent study, putting it a step ahead of the UK company’s treatment.

Shire is down 110p to £54.60 as US regulators decided to speed up a review of Sanofi’s treatment for Fabry disease, a potential competitor for the company.

Miners were also weaker as investors cashed in some of their recent gains. Rio Tinto is down 53p at £29.61 while Antofagasta has fallen 11p to 796.5p.

Standard Chartered has lost 13p to 1102.5p after it reported a 22% fall in first quarter profits with a rise in bad debts.

Whitbread is down 100p at £53.40 as an 18.5% full year profit rise at the Premier Inns and Costa Coffee group was overshadowed by news that chief executive Andy Harrison planned to step down by February next year. Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said:

Whitbread news is somewhat mixed. On the downside, the current chief executive is to retire, raising some uncertainty, moves to target selected overseas markets bring increased risk and potential currency headwinds, whilst the current valuation is seen as leaving little room for error.

On the upside, profits are above forecast, a near 20% increase in the full year dividend has been declared, whilst current (2016 and 2018) growth milestones remain on track with new 2020 targets outlined.

But British Gas owner Centrica has climbed 4.3p to 273.4p as its chairman said it had made preparations in case of a takeover approach.

BP is 3.9p better at 480.8p as the oil group reported better than expected first quarter profits of $2.6bn, down 20%, as refining profits helped offset the effects of the recent slump in crude prices.

Elsewhere Land Securities has added 2p to £12.73 as JP Morgan Cazenove raised its price target from £14.25 to £15.50. It said:

We see five reasons to buy: 1) valuation appealing, trading at 6.2% discount to March 2016 estimated net asset value, 2) IPD [property index] implies strong second half 2015 capital growth of up to 6.0%, 3) development pipeline could add another 90p to valuation and upside to 29%, 4) recent lettings show strong momentum, and 5) finally, we expect a positive 2015 result statement on May 19 2015.