Market Report: Shire among a handful of blue-chip winners

The drug maker was upgraded from neutral to buy following its $32bn (£22bn) cash-and-shares takeover of US rival Baxalta

Shire was among just a handful of blue-chip winners yesterday as investors were persuaded by Bank of America Merrill Lynch to snap up shares in the drug maker.

The bank upgraded Shire from neutral to buy following its $32bn (£22bn) cash-and-shares takeover of US rival Baxalta after a six-month stand-off. Its analyst Graham Parry said the deal “makes sense” and means Shire is less reliant on its main drugs Lialda and Vyvanse, whose patents expire in 2020 and 2023 respectively and together make up nearly 40 per cent of sales.

The analyst suggested that the shares – which slumped more than 30 per cent after the Baxalta bid – will recover to 5,550p.

Since falling 8 per cent on Monday, when the deal was agreed, the shares have recovered and rallied 49p to 4,179p yesterday on the back of Mr Parry’s comments.

Earlier this week, the chief executive Flemming Ornskov claimed the company could save more than the $500m it predicted when the two parties shook hands on the deal.

Shire was among the few risers as the FTSE 100 fell 114.13 points or 1.9 per cent to 5,804.1, dragged lower by falls on Wall Street and in oil prices – Brent crude is now well below $30 barrel.

With US markets closed on Monday for Martin Luther King day, New York’s traders were particularly jittery about volatility in China and the oil price slump and the Dow was down 500 points, or 3 per cent, in afternoon trade.

Miner Anglo American was back in losing territory, down 30.2p to 232.75p, while Randgold Resources was 158p better off at 4,387p as gold, historically known for its “safe haven” status, climbed 15.9 cents to $1,089.8 an ounce.

The fund supermarket Hargreaves Lansdown joined the miners in tumbling 83p to 1,220p as Citi urged clients to sell following last year’s 51 per cent surge.

Roman Abramovich’s Highland Gold Mining, up 0.25p at 55p, welcomed the return of former finance chief Denis Alexandrov, to be its chief executive. Mr Alexandrov managed the coffers of Mikhail Fridman’s Alfa Group before becoming managing director of the Ukrainian billionaire’s A1 investment group.