- AstraZeneca shares drop 6.2% after reported Bristol Myers Squibb merger talks
- FTSE 250 climbs 1%, outperforming blue-chip FTSE 100
- Clarkson jumps 7.8% after issuing upbeat full-year outlook
Aug 3 (Reuters) - The UK's FTSE 100 slipped on Monday as AstraZeneca shares fell on reports of a potential tie-up with U.S. drugmaker Bristol Myers Squibb, while lower oil prices dragged down energy heavyweights BP and Shell.
The blue-chip FTSE 100 index fell 0.10% to 10,857.49 points by 0931 GMT, while the mid-cap FTSE 250 rose nearly 1% to 24,206.25 points.
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AstraZeneca shares fell 6.2% as investors questioned the logic of a merger with Bristol Myers Squibb after reports they held preliminary about forming one of the world's biggest drugmakers. The stock was the top decliner in the FTSE 100.
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"The initial market reaction to the reports is highly circumspect, reflecting understandable caution about the scale of the deal. Major transactions of this kind often run into difficulties around integration and matching up different workplace cultures," said Russ Mould, investment director at AJ Bell.
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Meanwhile, shares of BP fell 1.6% and Shell dropped 0.8% as Brent crude prices fell about 5% after U.S. President Donald Trump held off a fresh attack on Iran as he sought a quick deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz.
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The broader British stock market and global stocks, however, took comfort from the fall in oil prices.
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Rate-sensitive housebuilding stocks including those in Vistry Group, Bellway and Persimmon climbed in the range of 4.8%-6.9% as UK bond yields fell on the back of a retreat in oil prices.
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British manufacturing activity expanded for a ninth straight month in July but at the slowest pace in four months, according to S&P Global purchasing managers' data that points to a renewed impact from the Iran war towards the end of last month.
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Among other movers, UK shipping services firm Clarkson rose 7.8%, leading gains across all London-listed stocks, after issuing upbeat full-year outlook.
Reporting by Sruthi Shankar in Bengaluru ; Editing by Nivedita Bhattacharjee
Source: Reuters