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Drugs giant AstraZeneca plummets in value by £7bn after key lung cancer treatment flops tests

AstraZeneca has plummeted 16pc following the failure of its lung cancer drug trial - Handout
AstraZeneca has plummeted 16pc following the failure of its lung cancer drug trial - Handout
  • AstraZeneca weighs down FTSE 100 after 16pc share price plunge following a lung cancer trial setback

  • The pharma giant has single-handedly offset large gains on the FTSE 100 by Diageo, Rentokil and Anglo American

  • Pound comes off highs against the dollar; now trading below $1.31

AstraZeneca shares have plummeted nearly 16pc on the FTSE 100 after the pharma giant announced a setback in its key lung cancer drug trial, wiping some £7bn off its value.

The MYSTIC trial was key to the company's growth plan and chief executive Pascal Soriot's strategy with analysts describing Astra as a "one trial company".

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Mr Soriot has said he is “here today” after repeatedly refusing to deny reports he is leaving the firm for Israeli rival Teva in a call with journalists.

The plunge in value may lead to pressure from investors for Mr Soriot to depart regardless of his own intentions, especially after the company rebuffed a takeover bid from US pharma giant Pfizer to back Soriot's plan.

5:25PM

Markets wrap: AstraZeneca drags FTSE 100 into the red; Jeff Bezos the world's richest man as Amazon shares jump

The FTSE 100 nudged a little lower today as contrasting fortunes on Super Thursday — the highlight of earnings season — resulted in a largely neutral finish.

Pharma giant AstraZeneca single-handedly dragged the index into the red, crashing 15pc after announcing a major setback in its lung cancer drug trial deemed to be the jewel in the company's drugs pipeline.

Elsewhere, Lloyds Bank also weighed heavily on the blue-chip index after revealing that its legacy issues regarding PPI are continuing while Smirnoff-maker Diageo climbed 6pc to an all-time high on a £1.5bn share buyback.

A quiet day on the currency markets has seen the pound slowly fade against the dollar, paring most of its overnight gains inspired by the dovish update from the US Federal Reserve. It is currently trading at $1.3060 against the greenback.

In the US, Amazon founder Jeff Bezos has become the richest man in the world after a 2.8pc rise in Amazon shares in anticipation of its interim results, which will be released after the closing bell in New York this evening, helped him overtake Microsoft founder Bill Gates.

Buoyed by an impressive batch of earnings this week, the Dow Jones, S&P 500 and Nasdaq have all hit fresh record levels this afternoon.

CMC Markets analyst David Madden commented on European markets' drift lower today:

"European equity markets are broadly lower on the day, and the markets endured an increased rate of selling in the afternoon.

"In Europe, investors will happily use disappointing corporate results as an excuse to exit the equity markets, but the opposite isn’t true when companies post positive figures. The sharp decline in AstraZeneca and the fall in Lloyds despite the bank increasing higher profits is a good example of how dealers are behaving."

FTSE 100
FTSE 100

4:38PM

AstraZeneca full report: Chief executive is "here today" after huge drugs trial setback sends shares spiraling

Pascal Soriot
Pascal Soriot could be under pressure from investors following the setback to the company's most important trial

Pascal Soriot, the chief executive of AstraZeneca, has said he is “here today” after repeatedly refusing to deny reports he is leaving the firm for Israeli rival Teva in a call with journalists after a huge setback in a major lung cancer clinical trial wiped $10bn-plus from its market value.

Mr Soriot said he was “very committed to delivering our strategy” but declined several times to be drawn on his own future, saying he would not comment on market speculation.

But he added: “I’m not a quitter - that’s as far as I will go. Throughout my professional life I’ve experienced good times and not so good times. You put your head down and focus on the goal.”

AstraZeneca’s share price plunged 16pc in early trading to $43 (£33), well below the £55 a share offer made by American drugs giant Pfizer and rejected by Mr Soriot just three years ago.

The plunge in value may lead to pressure from investors for Mr Soriot to depart regardless of his own intentions.

Read Iain Withers' full report here

AstraZeneca share price
AstraZeneca share price

4:30PM

Sports Direct swoops on French Connection shares as activists sell out

Mike Ashley
Mike Ashley's Sports Direct has upped its French Connection stake to 27pc

Two activist investors who declared war on French Connection's corporate governance have sold their entire stakes to Mike Ashley's Sports Direct in a move that gives the sportswear giant a 27pc grip on the fashion retailer.

Gatemore, which held an 8pc stake in French Connection, and OTK, which owned 7pc, had joined forces to push for changes at the embattled fashion retailer. They had called for founder Stephen Marks to step down and explore a sale process.

Sports Direct seized an 11pc stake in French Connection in February, but the swoop on Gatemore and OTK's shares takes the Mike Ashley-run business closer to the UK's 30pc threshold to launch a takeover. Sports Direct has built up a collection of stakes in other retailers including Debenhams, House of Fraser, Findel and - most recently - Game Digital.

Gatemore told The Telegraph that it had decided to sell out of French Connection because it was not satisfied with the pace of change at FCUK and had "decided not to ride out the investment during this period of uncertainty in the UK retail market".

Read Ashley Armstrong's full report here

4:03PM

FTSE 100 offsets AstraZeneca losses with help from less robust pound

FTSE 100
FTSE 100

The pound has come off its ten-month highs against the dollar following the opening bell in New York with the FTSE 100 now heading towards a flat finish after an eventful day of earnings.

US indices hitting fresh highs have "contrasted with a sour afternoon" over in Europe, commented Connor Campbell, an analyst at Spreadex.

He added on today's play in Europe:

"As for the FTSE, despite flirting with a weightier drop thanks to cable’s [pound against dollar] 10 month high and AstraZeneca’s 16% cliff-dive the UK index managed to hold off the kind of losses seen by its German cousin, instead dipping just 10 points.

"It helps that the pound became slightly less robust after the bell rang on Wall Street, its gains halving to 0.2% against the dollar and the euro."

There have been some massive gains on the mid-cap FTSE 250 index today with pharma company Indivior rising nearly 17pc after raising its full-year guidance and Acacia Mining rebounding 13pc after Barrick Gold told shareholders that it will begin discussions with the Tanzanian government to end the dispute on the flow of gold and copper concentrate exports.

Acacia had been severely affected by the ban and received a $190bn tax bill from Tanzanian authorities last week, sending its share price spiraling.

3:28PM

AstraZeneca reaction: MYSTIC as good as over; failure will remove around 10-15pc of mid-term earnings

Astra
There are still a number of other interesting pipelines, according to Jefferies

AstraZeneca's lung cancer drug trial setback is "not the end of the story but as good as", broker Jefferies has commented this afternoon.

The blow removes around 10-15pc of its mid-term earnings and valuation, it said.

However, it added that the company "still has a number of other interesting pipelines" and other assets that will support its share price in the future once the impact of MYSTIC has been priced in.

The setback has had a positive read-through to rival Merck & Co in the US but has hit Bristol-Myers Squibb shares by almost 5pc.

AstraZeneca share price
AstraZeneca share price

2:55PM

Libor faces the axe as regulators plan to use new index by 2021

Andrew Bailey
Top regulator Andrew Bailey wants banks to support Libor until 2021, when he expects to have a better alternative in place

Scandal-hit interest rate benchmark Libor will be phased out as the main index in the market by the end of 2021, the Financial Conduct Authority’s chief Andrew Bailey has announced.

Libor is supposed to indicate the prevailing interest rate at which banks will lend to each other in different currencies and over varying time periods.

In practice, however, few banks lend to other banks for long periods of time and so the index is made up of hypothetical numbers proposed by the participating banks, with an oversight panel checking up on their estimates.

Manipulation of the benchmark was uncovered in 2012, with traders fixing the rate to their own benefit, and banks artificially lowering Libor to flatter their own financial reputations.

Read Tim Wallace's full report here

2:48PM

AstraZeneca reaction: Particularly important as lung cancer is one of the largest opportunities in oncology

AstraZeneca shares are now at a six-month low after falling 16pc and many investors will be questioning chief executive Pascal Soriot's growth strategy, especially after the company rebuffed a £70bn takeover offer from US pharma giant Pfizer based on his plan.

Many analysts had said that AstraZeneca had become a "one trial company" and it appears the gamble may have misfired.

Morgan Stanley analyst Vincent Meunier said this why shares have plunged:

"MYSTIC was particularly important for AstraZeneca as 1st line lung cancer is one of the largest opportunities in oncology (market could range from $7B (~2x current market size) to $24B (~8x current market)"

And here's what a near 17pc overnight plummet looks like.

Astra
AstraZeneca shares are now at a six-month low

2:33PM

AstraZeneca reaction: Interim results highlight how important the MYSTIC trial was

Today's interim results prove how important the MYSTIC trial results were for AstraZeneca, given the "anaemic growth from its growth platforms", commented Mick Cooper, Trinity Delta analyst.

He added:

"A slew of news from AstraZeneca cannot hide the fact that the results from the MYSTIC trial are disappointing and that it is going to be difficult for it disrupt the established players in the lucrative immuno-oncology market.

"AstraZeneca and Pascal Soriot might both be approaching Teva quietly in light of these results."

Barclays analyst Emmanuel Papadakis said that the second quarter results are merely a "sideshow" when compared to the setback on the lung cancer drug trial. He added it was a "bitter disappointment" but noted that the trial is still not completely dead.

2:14PM

AstraZeneca reaction: Setback on most high-profile trial a body blow

Pascal
Pascal Soriot was linked to a move to Israeli pharma firm Teva

AstraZeneca has had a torrid day of trading, its shares crashing an incredible 16pc after announcing that it has suffered a major setback in its lung cancer drug trial.

To top it off, its chief executive Pascal Soriot didn't sound overly convincing on whether he would be staying at the company when he spoke to the media today. He was rumoured to be leaving for Israeli pharma firm Teva early this month but had indicated that he would be staying put.

Hargreaves Lansdown analyst Nicholas Hyett said that the setback on its most high-profile trial will be a major body blow.

He added:

"Analysts have been waiting for the numbers from the MYSTIC trial for months and had, admittedly tentatively, booked in billions of dollars of future sales from the combination therapy. Those healthcare billions will now be going elsewhere.

"While half year results do show profits improving, the numbers only serve to remind investors just how important it is for Astra to get new drugs off the ground. Product sales are tumbling and cost cutting and externalisations can only take the group so far.

1:51PM

Sir Dave Ramsden a dovish appointment at Bank of England, says Jefferies

Mark Carney
Sir Dave Ramsden will probably side with Mark Carney and the doves in the monetary policy tightening debate, according to Jefferies

Sir Dave Ramsden's appointment as deputy governor at the Bank of England "will be considered as a dovish appointment as far as monetary policy is concerned", according to Jefferies' chief European financial economist David Owen.

He added on the move:

"Apart from putting together the key five economic tests that kept the UK out of the euro in the first place the Government's Chief Economic Advisor and Head of the Government Economic Service was also key in putting together the Treasury papers together prior to the Scottish referendum but also very importantly those prior to last year's Brexit vote, which clearly warned about the economic consequences of the UK voting to leave the EU.

"Sir Dave comes on board at the BoE in Sept just ahead of the key November Inflation Report. So at the margin will be seen (rightly or wrongly) as reducing the risk of a rate rise later this year (although I would still not entirely rule one out)."

1:40PM

Strong US durable goods orders data distorted by strong Boeing performance

Only a small piece of economics has trickled out of the US today. It showed that durable goods orders in the US rose by 6.5pc in June over the previous month.

The figures were almost double the expected 3.5pc rise but analysts have pointed out that strong Boeing orders at the Paris Air Show distorted the data. Excluding the transportation sector, orders rose by just 0.2pc.

1:16PM

Bank of England names top Treasury economic adviser Sir Dave Ramsden as new deputy Governor

Dave Ramsden
Dave Ramsden will replace Charlotte Hogg who resigned in March, a month into the job

The Chancellor has appointed Sir Dave Ramsden as deputy Governor of the Bank of England, replacing Charlotte Hogg who resigned from the central bank after she failed to notify it that her brother worked in a senior strategy role at Barclays.

The new deputy comes from the Treasury, where he served as chief economic adviser.

He will work alongside existing deputies Ben Broadbent, who covers monetary policy, Sir Jon Cunliffe, financial stability, and Sam Woods, prudential regulation, and report in to Mark Carney, the Governor.

Ms Hogg, who had been the bank's chief operating officer, was named as the Bank's fourth deputy Governor, to focus on markets and banking, in February.

But by early March she resigned following an intense grilling by the Commons Treasury Select Committee in which it emerged she had failed to disclose her brother's job in the application process.

Read Tim Wallace's full report here

1:13PM

Can Amazon continue the bumper earnings season in the US?

Prime day
Prime Day could provide a boost to earnings

Amazon is the next giant to post its highly anticipated results in the US later today.

Amazon Prime Day has now become a bigger date in the company's sales calendar than Black Friday and the 60pc sales increase it achieved this year should help boost its figures.

CMC Markets analyst David Madden believes that this quarter "could become a significant turning point for Amazon's shares".

He said this in his preview of its results, which are due after the closing bell in New York tonight:

"Following a month of consolidation, the shares recently resumed their uptrend, breaking out over the $1,000 level and challenging $500B in market capitalisation.

"The big question now is whether reaching these big round numbers is the last hurrah or a speed bump on the way to higher levels.

"Investors in tech stocks want to see revenue growth and that is what Amazon have in abundance, over the long-term. The high cash flow at the company allows it to pour funds into other businesses like Amazon Prime and Amazon Echo. Netflix has sent the trend for online streaming and producing popular content, and it is up to Amazon Prime to start catching up with them."

12:54PM

Profits surge at Rentokil after rat catcher benefits from sale of its uniform division

Rentokil
Rentokil has made 25 acquisitions in just over two years

Pest control and hygiene company Rentokil’s move away from lower growth businesses - such as its division which cleans and provides company uniforms - has boosted its profits by more than 637pc in the last six months.

The firm’s pre-tax profits stood at £592.9m in the first half of 2017, up from £80.4m in the same period last year.

The surge came after Rentokil booked profit of £481.6m from moving some of its businesses into a new joint venture in December last year.

Its workwear and hygiene business in 10 European countries was transferred into a new vehicle with Germany peer Haniel.

This was intended to allow Rentokil to focus on its core pest control and cleaning businesses in growth markets, and the company will invest the money back into these divisions.

Shares have jumped 4.3pc in intraday trading.

Read Rhiannon Bury's full report here

Rentokil share price
Rentokil share price

12:43PM

Tinker, Taper, euro high: German DAX hampered by euro strength

Tinker
Tinker, Taper, euro high

Full marks to Mike Van Dulken, head of research at Accendo Markets, for the title of his lunchtime markets summary: "Tinker, Taper, euro high".

Mr Van Dulken commented that the DAX in Germany is "underwater due to euro strength" following last night's dovish Federal Reserve policy update and disappointing Deutsche Bank second quarter results. The index has fallen 0.5pc today with pharma giant Bayer AG dropping 2.5pc on a weaker outlook.

He added:

"Equities are mixed this morning, reacting to a skinful of corporate updates and a dovish Fed chaser.

"Whilst the former offers a cocktail of mixed messages, the latter is producing both help and hindrance by way of a weaker dollar (good for commodities, but strengthens the pound and euro), seeing the UK FTSE hold flat but German DAX nurse losses."

I wonder how long he's been sitting on that headline for.

12:11PM

From Liverpool to east London: Local currencies are making a comeback

From Liverpool to east London: Local currencies are making a comeback
From Liverpool to east London: Local currencies are making a comeback

With little excitement on the currency markets this morning, maybe Sophie Christies' guide to alternative local currencies in the UK, featuring the Hullcoin and the Totnes pound, can fill the void.

12:02PM

Lunchtime update: FTSE 100 flat as large losses offset large gains

Diageo
Diageo has risen over 7pc after it announced a share buyback

The FTSE 100 is flat as we approach lunchtime, remaining largely unchanged from this morning. That doesn't quite paint the full picture, however, with large losses offsetting large gains.

Pharma firm AstraZeneca is still down a whopping 16pc following a setback in its lung cancer drug trials and energy company SSE has plunged 5pc after it went ex-dividend.

At the other end, Smirnoff-maker Diageo has had a strong morning, rising 7.1pc, after it announced a £1.5bn share buyback while support services company Rentokil has advanced 4.7pc following a profit surge in its first-half.

Nothing much to report from the currency markets, the pound has held its overnight gains against the dollar, trading at $1.3148, while against the euro it has nudged a little higher, paring some early losses.

The rest of the markets have settled "into a post-Fed earnings-stuffed pattern" this morning, according to Spreadex analyst Connor Campbell.

He added:

"The FTSE was completely inert, stuck effectively unchanged just below 7450. That is an improvement, however on where it was in the early moments of the session, where the weight of sterling’s gains had sent it careening into the red.

"Between cable’s 10 month highs following yesterday’s dovish Fed statement and a mixed set of corporate earnings that has AstraZeneca’s 16% plunge on one end and Diageo’s 6.7% surge at the other, it seems there is just a bit too much for the FTSE to process, leading to its rather lifeless performance."

Here's the current state of play in Europe:

FTSE 100: +0.07pc

DAX: -0.44pc

CAC 40: +0.11pc

IBEX: +0.04pc

11:34AM

Foxtons profits plunge by 64pc as it blames 'unprecedented' uncertainty in the market

Foxtons
Turbulence is ahead for the lettings agency as the Government introduces a ban on one-off tenant fees

Beleaguered estate agent Foxtons has posted a 64pc fall in profits as it continues to be dogged by London’s sluggish property market.

Foxtons said the market had been hampered by “unprecedented economic and political uncertainty" as it revealed that first-half profits plummeted from £10.5m to £3.8m in the six months to the end of June.

Its group revenues were also significantly down, falling 15pc from £68.8m in the first half of 2016 to £58.5m.

The decline was driven by a 29pc drop in revenue from property sales against tough comparisons from last year, when the company benefitted from a “surge in transactions” before stamp duty went up.

Shares have slumped 4.2pc this morning following the results.

Read Sam Dean's full report here

11:30AM

Summer sunshine boosts retail sales growth

July
July's retail sales growth was helped by the warm weather

Warm summer weather helped retail sales growth pick up in July despite the squeeze on households caused by inflation and sluggish wage growth, according to the CBI.

Some 48% of retailers said that sales volumes were up in July on a year ago, whilst 26% said they were down, giving a balance of +22%, the CBI said.

However, Anna Leach, CBI Head of Economic Intelligence, said that the factors underpinning future growth were "shaky" and that consumer spending is expected to slow as households feel the pinch.

She said this on the latest figures:

"The warm summer has added a sizzle to our high streets as shoppers defied expectations, with sales growth in clothing shops and grocers driving overall performance."

The tough consumer backdrop isn't dampening the high street's expectations for the rest of the summer, however, with retailers saying that they believe they will achieve similar growth in August, according to the CBI.

11:03AM

Divigence of stock market fortunes on either side of Atlantic due to dollar weakness, says IG

The weaker dollar has caused US stock markets to soar while their European peers struggle, according to IG market analyst Joshua Mahony.

The greenback has slumped to a two-year low on the back of the political inertia in Washington DC and a dovish wariness shown by Janet Yellen and the US Federal Reserve. Some of the largest American firms' overseas earnings have been boosted by the recent decline in the dollar with many, including McDonald's and Coca-Cola, posting expectation-beating figures this week.

Back in the UK, Royal Dutch Shell has risen 1.1pc following its results despite telling shareholders to brace for a "lower forever" oil price environment.

Mr Mahony said this on Shell's results this morning:

"Coming off the back of yesterday’s inventories-driven spike for crude, this morning’s Royal Dutch Shell profit outperformance provided a welcome boost for the turbulent oil and gas sector.

"Considering that it has now been three-years since the price of crude crashed from over $100 a barrel, it is amazing that there is still cost cutting going on. Nevertheless, the continued streamlining of operations remains key, with capital efficiency, costs control, new project delivery and divestments cited as key focuses going forward.

"Perhaps the most notable event came from outside of the earnings, with the Shell CEO admitting that the company now has a ‘lower forever’ mindset when it comes to oil prices."

10:45AM

Sky ramps up drama spending as profits take a hit from Premier League rights

Sky
Fantasy epic Game of Thrones has helped attract Sky subscribers

Sky will boost its budget for dramas by a quarter this year in an effort to keep pace with heavy spending by Netflix and Amazon and capitalise on strong international appetite for box sets.

The extra cash, taking the total to more than £100m, will mean the pay-TV operator will debut four original series on its channels every quarter.

Sky, which has relied heavily on HBO’s fantasy epic Game of Thrones to attract box set fans, said it had a hit on its hands in Riviera, a crime thriller. It has been Sky's most popular in-house production to date, drawing more than two million viewers.

Sky announced higher drama spending alongside its annual results, which showed the impact of an 83pc increase in its Premier League rights bill.

Shares dipped 0.2pc this morning to 964.5p.

Ready Christopher Williams' full report here

10:35AM

Dollar weakness pushes up oil and gold prices

Gold
Gold is at a six-week high following the Fed's meeting

Gold climbed to a six-week high overnight as the dollar plunged following the Federal Reserve's meeting. It is currently trading at $1262 per ounce with Randgold Resources rising 1.9pc on the FTSE 100 in response this morning.

With most commodities quoted in dollars, oil also received a small bounce from the weaker dollar. Brent crude passed the psychological $50-per-barrel mark earlier this week as data from the API and EIA in the US showed a far sharper drawdown in US crude inventories than the market expected.

This morning, Brent is trading at $50.86, a 5.8pc rise over the week.

10:21AM

Lloyds Bank takes another £1bn hit for PPI compensation claims

Lloyds
Lloyds' shares fell 2.2pc this morning

Lloyds Banking Group has set aside another £1bn to cover charges relating to payment protection insurance (PPI) claims, bringing its half-year profits slightly below analyst expectations.

The charge, which is more than planned following a £700m top-up in the second quarter, meant that Lloyd's pre-tax profits rose just 4pc to £2.5bn in the six months to June, below City expectations of £2.9bn.

Lloyds' total bill for the PPI scandal now stands at just over £18bn, the largest in the banking sector. The extra amount will be used to cover "reactive claims" of around 9,000 per week ahead of the August 2019 deadline for complaints.

On top of the PPI hit the 252-year-bank also confirmed on Thursday that it will repay just under £300m (£283m) back to 590,000 mortgage customers mistakenly charged between 2009 and January 2016.

Shares in the bank slipped on Thursday morning as the market digested the news.

Read Lucy Burton's full report here

10:19AM

AstraZeneca chief executive fails to squash departure rumours

Only weeks after indicating that he would be staying on as AstraZeneca chief executive with rumours swirling that he would be leaving for Israeli pharma firm Teva, Pascal Soriot hasn't done much to put the issue to bed in his media call this morning.

Refusing to comment on the speculation, Mr Soriot said that the "only thing I can tell you is I am here today".

Shares plunged when the pharma giant stayed silent on the departure rumours but this morning Mr Soriot's ill ease with the subject hasn't sent the stock sliding any further. It has stabilised at around £43, a 16pc fall today.

10:06AM

FTSE 100 would be comfortably in positive territory without AstraZeneca sell-off

FTSE 100
FTSE 100

The FTSE 100 would be comfortably in positive territory if it wasn't for the 40-point hit it's taking from AstraZeneca this morning.

Instead it's flat for the session with the overall index being supported by alcoholic beverage giant Diageo, which has risen 6.3pc, following the announcement of a £1.5bn share buyback and Anglo American rising 3pc after the miner reinstated its dividend.

On a rising FTSE 250 index, drugs manufacturer Indivior has surged 12pc after increasing its full-year guidance while shopping centre-owner Intu Properties has tumbled 3.8pc following its disappointing results.

Fortunes are mixed in Europe with the DAX in Germany falling 0.5pc this morning, dragged down by pharma giant Bayer AG lowering its full-year profit guidance. Meanwhile, the CAC 40 and Euro Stoxx 50 have had modest rises.

9:41AM

Anglo American restarts dividend as it smashes debt target

Iron Ore
Higher iron ore prices have boosted Anglo American's earnings

Mining group Anglo American has surprised investors by restarting its dividend six months early, boosted by better than expected profits, which helped it pay off more debt than it planned.

The FTSE 100 miner, which was laid low by a two-year downturn in commodity prices that forced it to cancel shareholder payouts and sell off assets, reported a 68pc jump in earnings before interest, tax and other charges to $4.1bn (£3.1bn) in the six months to June 30.

Net profits were $1.4bn (£1.07bn), versus an $800,000 (£608,000) loss in the same period a year ago.

Much of the improvement was due to soaring prices in iron ore and coal, two commodities Anglo had attempted to back out of during the downturn. By contrast, earnings from its three favoured commodities – diamonds, platinum and copper – were broadly flat.

Shares have jumped 2.9pc following its results this morning.

Read Jon Yeomans' full report here

9:39AM

Federal Reserve meeting: Massive disappointment for dollar bulls

The pound is at a ten-month high against the dollar following last night's Federal Reserve meeting, which was a "massive disappointment for dollar bulls", according to Ipek Ozkardeskaya, analyst at London Capital Group.

Ms Ozkardeskaya argues that Bank of England officials won't be in any rush to change the current momentum on the currency markets:

"It is certainly too early for the Bank of England doves to counterbid. In contrary, a stronger pound should ease the UK’s inflationary pressures and allow the BoE doves to stay on top of the game.

"Therefore a USD-triggered move will certainly meet sellers, yet there is no rush to spoil the current beneficial trend."

The Jackson Hole Economic Policy Symposium in August is now the major date in the diary of all central bank watchers.

European Central Bank president Mario Draghi will attend just before it is rumoured to announce the tapering of its bond-buying programme while Janet Yellen's appearance has now been earmarked as one to watch after the Fed revealed very little last night, .

9:14AM

Lloyds shares dip after setting aside another £1bn for PPI claims

Lloyds Banking Group shares have slumped 1.6pc this morning after it revealed that it has set aside another £1bn to cover costs relating to payment protection insurance claims. The hit means that pre-tax profits missed analyst expectations and it could get worse, according to senior market analyst at ETX Capital Neil Wilson.

Mr Wilson added this on how PPI, which has already cost the bank £18bn, could affect Lloyds in the future:

"PPI remains a thorn in the side of Lloyds and it could yet get worse. The bank stressed that ‘risks and uncertainties remain’ with respect to future volumes of claims.

"Costs could easily rise again. Lloyds has so far settled or provided for just over half of all the 16m PPI policies sold since 2000. Not all PPI policies were mis-sold, of course, but it would be reasonable to assume that there will have to be further provisions made.”

LLoyds' share price
LLoyds' share price

9:01AM

AstraZeneca suffers huge setback as its Mystic lung cancer trial fails tests

Astra
AstraZeneca has plunged 16pc this morning following the setback

AstraZeneca’s landmark Mystic clinical trial for a new lung cancer drug has failed its initial round of tests, sending shares plummeting by 16pc. The company's share price fell 15pc when the market opened on Thursday morning.

Mystic - a trial of AstraZeneca’s immuno-oncology (IO) drug Imfinizi - failed to improve progression free survival in patients compared to using chemotherapy, the firm said today.

The trial was AstraZeneca’s big play for a bite of the fast-growing immuno-oncology drugs market, worth $8bn (£6.3bn) today and projected to reach $50bn in value.

While Imfinzi has been successful in improving life chances for patients with other cancers and has won some regulatory approvals, Mystic was its biggest clinical trial yet and was for the largest potential unmet patient need: lung cancer.

The negative readout is likely to intensify questions about AstraZeneca chief executive Pascal Soriot’s future at the firm - which separately posted interim results today. Mr Soriot has recently been linked to rival firm Teva, although he is understood to be staying put.

Read Iain Withers' full report here

AstraZeneca share price
AstraZeneca share price

8:55AM

US markets close at fresh record highs; Fed interest rate hike delay hint hits dollar

Even without AstraZeneca's plunge this morning the FTSE 100 would be facing an uphill battle to finish in positive territory today with the pound rising so strongly against the dollar.

After starting the week below $1.30, the pound is now 1.3pc higher against the dollar with last night's lurch higher following the Federal Reserve policy meeting the principal reason.

The central's banks caution on weak inflation "was taken as a rate-hike delaying comment", according to Spreadex analyst Connor Campbell.

US equity markets closed at record highs again last night as the prospect of a delayed interest rate rise and another set of bumper earnings lifted the major indices. Asian markets followed suit, boosted by buoyant investor sentiment, with the Nikkei 225 nudging 0.15pc higher and the Hong Kong Hang Seng rising 0.8pc.

Mike Van Dulken, head of research at Accendo Markets, said this on last night's action across the pond:

"The Dow Jones outperformed as Boeing rallied almost 10% on impressive Q2 numbers, offsetting the combined losses of all 16 falling stocks.

"The Nasdaq also rallied, notching a second straight record high, while the S&P 500 closed just above break even after Telecom strength offset Financial weakness."

8:34AM

Agenda: Pound advances on dollar weakened by Fed meeting; AstraZeneca plummets 15pc to weigh on the FTSE 100

Welcome to our live markets coverage.

The pound advanced to a ten-month high overnight as the dollar took a battering on the currency markets following the US Federal Reserve policy meeting, the greenback slipping to lowest in over two years against a basket of the leading currencies. Sterling is trading at $1.3132 against the dollar this morning

While the Fed did use more hawkish rhetoric on when it will begin to unwind its $4.5bn balance sheet, saying "relatively soon" rather than "this year", traders stateside preferred to focus on Janet Yellen and co's caution on inflation.

September still appears to when traders are betting the central bank will begin reducing its balance sheet but the Fed's dovish tone means that the chance of a rate hike in the US before the end of the year is now 40pc.

Earnings season is now in full swing and 'Super Thursday' is the peak of this week's corporate action. Anglo American has restarted its dividend after beating its debt reduction target, Lloyds has taken another hit from its PPI legacy issues and Shell has reported a strong rise in its second quarter profits.

Despite the strong earnings, the FTSE 100 has fallen early on with AstraZeneca's 15pc plummet this morning single-handedly dragging the index into negative territory. The pharma giant revealed this morning that it has suffered a major setback in its lung cancer drug trial.

Interim results; Vesuvius, Intu Properties, Royal Dutch Shell, Primary Health Properties, Schroders, RELX, Anglo American, Jardine Lloyd Thompson Group, Rentokil Initial, Weir Group, Just Eat, Inchcape, Indivior, Lloyds Banking Group, British American Tobacco, Telefonica, National Express Group, Bodycote, St James’s Place, Countrywide, Smith & Nephew, AstraZeneca, Greencoat UK Wind, Lancashire Holdings

Full results: Clipper Logistics AGM: Orogen Gold, Etalon Group, CMC Markets, Volex Group, Escape Hunt

Trading statement: Tate & Lyle, Thomas Cook Group, Sophos Group, Kaz Minerals, Ladbrokes Coral Group, Daily Mail and General Trust, CMC Markets

Economics: Core durable goods orders m/m (US), Unemployment claims (US), Preliminary wholesale inventories m/m (US), Durable goods orders m/m (US), Goods trade balance (US), GFK German consumer climate (GER), Private loans y/y (EU), M3 money supply y/y (EU),