FTSE 350 shares round-up: AstraZeneca, BAT, Playtech, Saga

Photo: Cheng Xin/Getty Images.

The underperformance of the FTSE 100 index was today blamed on just two stocks after heavy falls by AstraZeneca (LSE:AZN) and British American Tobacco (LSE:BATS) offset the resurgence of Glencore (LSE:GLEN).

Astra and BAT are the second and sixth-largest companies in the index by market capitalisation, with their combined weighting of 13% behind the benchmark’s reverse of 58.11 points to 10,430.93. The FTSE 250 posted a small gain, while the S&P 500 index opened higher.

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The drugs giant traded at its lowest level of the year after its 2030 ambition of growing revenues to $80 billion (£59.7 billion) was hit by the failure of a late-stage clinical trial for a major heart condition.

Bank of America said the Wainua setback was a surprise and that it represented a mid-single digit downside to group sales forecasts.

However, the bank reiterated a Buy stance and price target of 16,500p as it said the success of Astra’s pipeline of key assets over the next two years still offered re-rating potential.

The shares settled near 13,000p, down from 15,500p in February and last night’s 14,240p.

British American Tobacco fell 121p to 4,490p after its shares reached the cut-off point for eligibility to the second-quarter dividend of 61.26p due for payment on 14 August.

The income stock, whose £100 billion market capitalisation means it accounts for about 3.8% of the blue-chip benchmark, is the biggest of July’s ex-dividend stocks.

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Shares of the Dunhill, Rothmans and Vuse brand owner have drifted from May’s 4,960p, having surged by 20% over the previous month.

Glencore, which has an index weight of about 2.4%, led a much-improved session for the mining sector after its shares rallied 24.35p to 515p.

The price compares with early June’s 615p after a year-long run from 300p that saw European miners outperform the wider market by 65%. This was driven by a rally in key metals like copper, which rose by 55% to hit an all-time high price in May.

Bank of America noted today that the mining sector was increasingly trading as a “picks and shovels” beneficiary of the AI capex boom, given the wider implications for copper demand from the resulting grid and electricity generation build-out.

That’s made it sensitive to swings in AI sentiment, even though direct copper demand from data-centre construction remains a small share of overall global copper consumption.

The bank said that European miners have underperformed by 15% since early June, reflecting wider market worries about the sustainability of the capex ramp-up. The de-rating came even as consensus earnings per share forecasts relative to the market continued to rise.

While BofA’s analysts remain cautious on large mining names in the near term, they are bullish on the sector in the medium term.

They said that constrained supply should offer medium-term support for copper, given declining ore grades, ageing mines, longer project timelines and higher capital intensity. India is also an increasingly important source of demand, particularly for steel and potentially iron ore.

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A stronger copper price today meant Anglo American (LSE:AAL) and Antofagasta (LSE:ANTO) joined Glencore near the top of the FTSE 100, which was led by newcomer Computacenter (LSE:CCC) after the IT services firm said annual results should be comfortably ahead of market expectations.

Playtech (LSE:PTEC) topped the FTSE 250 after the online betting and gaming industry technology firm said an excellent performance in the US drove a forecast-beating half-year performance.

Meanwhile, over 50s insurance and travel firm Saga (LSE:SAGA) rose another 23p to 612p after City firm Berenberg launched its coverage with a price target of 1,025p.

That compares with the company’s price of 270p in early December. The turnaround in fortunes follows Saga’s material transformation from a complex and over-levered business to a predominantly travel-focused one with a capital-light insurance offering.

Berenberg said: “With the transformation almost complete, we see plain sailing ahead for Saga, where we expect its durable brand and strong travel offering to drive growth and cash generation.”