Shares in British pharmaceutical company AstraZeneca drop 1.5 percent, the biggest loser on the UK blue-chip FTSE 100 , after the company suspends its share repurchase programme with immediate effect.
The surprise announcement drives heavy demand to sell the stock, with volumes hitting 1 1-2 times the 90 day average against 50 percent for the broader index.
AstraZeneca shares plummeted on the news, losing 3 percent in the first half an hour after the announcement to hit an intraday low before recovering.
"Share repurchases are supportive to the stock price on a day by day basis, so there's a couple of billion dollars worth of demand over the rest of the year that won't be satisfied by the company purchasing in the market," says Mark Clark, industry analyst at Deutsche Bank.
AstraZeneca said the move was a "prudent step to maintain flexibility", raising concerns among some investors that new CEO Pascal Soriot is seeking to preserve cash ahead of potential acquisitions.
"What it probably reflects is a concern that there's going to be a more aggressive M&A (mergers and acquisitions) strategy pursued by (new CEO) Soriot," Mick Cooper, analyst at Edison Investment Research, says.
"This action adds a bit more uncertainty over what the next strategy is going to be."
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