FTSE registers third straight week of gains

Britain's top share index edged higher on Friday, making its third straight week of gains as weakness in banking and mining stocks was offset by strength in pharma shares. The FTSE 100 ended 0.2 percent higher, up 1 percent for the week. Markets, which had been nervous about the prospect of Donald Trump winning the US election, have rallied since his victory on plans for higher infrastructure spending and fiscal stimulus that suggest improved prospects for growth and inflation.
That has helped commodity stocks, which are viewed as a hedge against inflation and benefit from faster growth in industrial output. Miners, however, ended broadly weaker on Friday, with Rio Tinto giving up most of its earlier gains to end only 0.3 percent up on the day. Its chief executive said that the election of Trump could boost commodities demand.
Glencore and Anglo American both fell more than 1.5 percent. Drugmaker AstraZeneca rose 2.2 percent in a buoyant pharmaceuticals sector. Traders linked the move in AstraZeneca to a report that US healthcare group Johnson & Johnson was interested in buying Switzerland's Actelion, sparking bets on further M&A in the sector. AstraZeneca has shed more than 20 percent since early August, hit initially by concerns that a victory for Hillary Clinton in the US election would result in more regulation for drugmakers, and more recently by warnings from its CEO on persistent pricing pressures and uncertainty about Trump's healthcare policy.
However, traders said that the reported bid from J&J for Actelion was evidence that there could still be support from M&A in the sector. "Bid speculation in AstraZeneca is likely to return. There was a huge pullback in their shares, and you have to see this as an opportunity," said Zeg Choudhry, managing director at broker LONTRAD. The stock was also supported by Liberum's upgrading of the company to "buy" from "hold".
Lloyds was the biggest loser among banking stocks, falling 1.5 percent. "We are sell-rated on Lloyds due to further asset margin headwinds," analysts at Goldman Sachs said in a note, looking at British banks ahead of Bank of England stress tests. It said that the stress tests would be the toughest so far, though the sector was in a much improved starting position compared with previous years.