Pharmaceuticals inject more life into the FTSE 100's rise

THE FTSE 100 added 0.3 per cent yesterday, extending its winning streak to eight sessions thanks to modest gains on Wall Street and solid second-quarter results from drugs giant GlaxoSmithKline. At the close, the index was 12.56 points higher at 4,493.73, up 8.2 per cent over the past eight sessions.<br /><br />Drug maker <strong>Shire</strong> was the best large-cap performer, up 4 per cent, with its second-quarter results due in a few weeks, while <strong>AstraZeneca</strong> gained 1.2 per cent. <br /><br />But <strong>GlaxoSmithKline</strong> surrendered earlier gains, shedding 0.6 per cent on profit-taking after its second-quarter earnings beat expectations and the firm said momentum in the second half would pick up on the back of flu vaccine sales.<br /><br />Other defensive stocks were in demand as investor&rsquo;s risk appetite abated slightly after the recent strong run, with tobaccos, mobile telcoms and utilities standing out. <br /><br /><strong>Imperial Tobacco</strong> was a strong gainer, up 2.7 per cent ahead of a trading update due today, while <strong>British American Tobacco</strong> added 1.2 per cent. Market heavyweight <strong>Vodafone</strong> gained 1.0 per cent after BT Ireland said it would transfer its consumer and small business broadband and voice consumer base to Vodafone Ireland. <br /><br />Among utilities, <strong>Severn Trent</strong> added 1.2 per cent, extending Tuesday&rsquo;s gains, which followed a trading update, while <strong>Pennon</strong> firmed 2.2 per cent and <strong>Scottish &amp; Southern Energy</strong> took on 1.8 per cent, ahead of today&rsquo;s update.<br /><br />Nomura pointed out that shares in the water companies have been overly pessimistic ahead of today&rsquo;s draft price determination by regulator OFWAT.<br /><br />Oil majors were mixed as crude prices stayed weak. <strong>Royal Dutch Shell</strong> lost 0.5, but <strong>BP</strong> added 0.1 per cent and <strong>BG Group</strong> gained 1.7 per cent helped by the re-emergence of vague takeover talk.<br /><br />Banks were weak after the latest results from their US peers dampened optimism about a recovery in the financial sector. <strong>Barclays</strong>, <strong>Lloyds Banking Group</strong>, <strong>Royal Bank of Scotland</strong> and <strong>Standard Chartered</strong> shed between 0.3 and 3.1 per cent.<strong> HSBC</strong> added 1.0 per cent.<br /><br />Insurers suffered too, with <strong>Aviva</strong>, <strong>Legal &amp; General</strong> and <strong>Standard Life</strong> off 0.3 to 2.2 per cent.<br /><br />Weakness in mining issues weighed heaviest on the blue chips as investors booked profits after a recent rally.<br /><br /><strong>Lonmin</strong>,<strong> Kazakhmys</strong>, <strong>BHP Billiton</strong>, <strong>Eurasian Natural Resources</strong> and Antofagasta fell between 1.0 and 3.2 per cent.<br /><br />BHP Billiton reported a 10 per cent fall in iron ore output to 27.048m tonnes after its operations were hit by mining fatalities and flooding in Australia. <br /><br />On the macroeconomic front, Confederation of British Industry industrial data showed that its manufacturing order book fell to its lowest level since January 1992.