London Rises On Wellcome News (Press, 21 August 1989)

On 21 August 1989, share prices in London remained steady during a quiet trading session following a recovery in Wall Street from earlier declines, which were caused by losses in Treasury bonds. The UK drug company Wellcome was a significant driver of market strength, with its share price rising by 154 pence to 663 pence after a US survey indicated that its AZT drug for AIDS could delay disease progression in asymptomatic patients. By the afternoon, the FTSE index had increased by 12.5 points to 2372.5. In the previous trading day, shares had decreased as Wall Street continued to experience losses after an initial positive response to a smaller-than-expected trade gap in the US for June. Notably, Cable and Wireless saw a gain of 12 pence to 584 after revealing a promising revenue growth rate per subscriber in its Mercury Communications unit, detailed in its prospectus for American depositary shares. Similarly, Royal Insurance reported half-year pre-tax profits of £119.6 million, although this was down from £154 million in the previous year. Despite profit declines, Royal Insurance raised its dividend payment by 13 per cent to 10.75 pence, demonstrating resilience amid increasing competition. In broader market trends, a reported 20 per cent increase in Scotch whisky exports, which reached £674 million in the first half of 1989, contributed to positive sentiment among brewers, as there was also strong demand for other alcoholic and soft drinks. However, investor reluctance was observed as they remained cautious due to previous sharp declines in share prices, compounded by an upcoming crucial set of data releases from the UK and US. By late afternoon trading, the FTSE index was slightly higher at 2328.2 points, managing to close above its worst levels from earlier in the week. This improvement followed moderate trading on Monday, which had also seen significant markdowns earlier in the session. The news detailed a range of closing prices for various stocks (sterling) and included listings for companies such as AMEC and BP, as well as Australian shares including ANZ Bank and BHP. Overall, the market outlook remained mixed, reflecting the challenges investors faced amidst a recoverable but cautious trading environment.

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