FTSE 100 movers: Antofagasta descends, Shire rebounds

In a largely quiet day, the FTSE 100 was dragged lower after losing momentum towards the end of the day, while the London Stock Exchange launched the first of its new daily intra-day auctions.

At noon, the LSE stopped automated trading of stocks traded on the SETS system, the largest shares on the exchange, for two-minutes to allow institutional investors to enter, modify and delete very large orders on the exchange rather than using off-exchange networks called “dark pools”.

Monday's début saw the FTSE 100 index frozen at a price of 6,188.37 from midday, before reaching 6,194.75 after the resumption of trading two minutes later, with the LSE reporting that 61 member firms traded a total of around 500 stocks worth just under £11m.

These auctions will now take place every trading session at midday.

Across the course of the day, miners were one of the biggest millstones around the index's neck. Chilean copper giant Antofagasta was the worst performing of these stocks.

Analyst Brenda Kelly of London Capital Group pointed out that copper prices were muted around $2.27/lb and the market seemed "unwilling or unable" to give the metal a boost that would allow it to run through the 200-day moving average with any real conviction.

"Much of this has to do with this renewed dollar strength which is capping gains in commodities and thus creating the usual casualties in the basic resource space," Kelly said.

The biggest riser was Shire, up 4.04% thanks in part to analysts at Exane pointing out that the stock appeared too cheap.

Exane said much of the cheapness was due to some disillusion with Shire’s pursuit of US peer Baxalta, which many investors see as diluting the company’s long-term growth path and others see simply as a move to shift Shire’s market capitalisation out of the M&A target zone.

“The transaction, around two-thirds in shares, has also created a significant flow of risk-arbitrage short selling which has depressed the share price,” Exane said.

Exane said that whatever management’s reasoning is behind the deal, “it doesn’t look such a bad long term move to us” and certainly not bad enough to justify a price/earnings to growth ratio of 0.6 times.

Elsewhere, Sainsbury's was among the top ten risers following Friday's unexpected turn of events in the race for Argos owner Home Retail Group. South Africa's Steinhoff International withdrew its rival bid on Friday afternoon, leaving a clear path for Sainsbury's, which announced a cash and share offer one minute after market's closed for the week.

The offer was the same as that made on 2 February, thought the value of the deal has risen to 173.2p for each HRG share thanks to the appreciation of the grocer's own share price in the interim. Having crunched the numbers again, Sainsbury's also said it now expects EBITDA synergies of at least £160m in the third full year after completion, £40m more than its previous estimate.

Whitbread was also on the leaderboard, following weekend reports that the owner of the Premier Inn hotels and Costa coffee shops chains is facing calls from major shareholders about a potential split of the two parts of the group. Although new chief Alison Brittain is expected to fight any calls for a break-up, according to the Sunday Telegraph, she has been reported as saying “there could be circumstances that arise that make it a viable or interesting option”.

On Monday, analysts at JPMorgan Cazenove said they saw a sum-of-the-parts valuation for Whitbread would create 12% upside at a fair value of 4,399p, based on using valuation multiples from the hotel sector and Starbucks. Cazenove's valuation for Costa alone of £4.1bn compared to Jefferies's £3.1bn calculation, which is around the consensus.

Paddy Power Betfair was another riser, as the newly merged bookmaker began trading as a FTSE 100 company for the first time. Also joining it in the blue chip index were Mediclininc, Informa and Morrisons.

Market Movers

FTSE 100 (UKX) 6,177.99 -0.19%
FTSE 250 (MCX) 16,876.62 -0.15%
techMARK (TASX) 3,083.04 0.30%

FTSE 100 - Risers

Shire Plc (SHP) 3,840.00p 4.04%
Paddy Power Betfair (PPB) 9,000.00p 1.52%
Sainsbury (J) (SBRY) 276.10p 1.06%
Pearson (PSON) 903.50p 1.01%
Worldpay Group (WI) (WPG) 276.00p 0.95%
Whitbread (WTB) 3,959.00p 0.84%
Tesco (TSCO) 196.45p 0.82%
Reckitt Benckiser Group (RB.) 6,649.00p 0.74%
Direct Line Insurance Group (DLG) 378.00p 0.67%
AstraZeneca (AZN) 3,913.50p 0.60%

FTSE 100 - Fallers

Antofagasta (ANTO) 494.40p -3.91%
Aviva (AV.) 473.70p -2.61%
London Stock Exchange Group (LSE) 2,827.00p -2.25%
Randgold Resources Ltd. (RRS) 6,375.00p -2.07%
Old Mutual (OML) 193.00p -1.83%
Rolls-Royce Holdings (RR.) 704.50p -1.67%
Coca-Cola HBC AG (CDI) (CCH) 1,432.00p -1.51%
Glencore (GLEN) 158.55p -1.40%
BHP Billiton (BLT) 819.80p -1.31%
Anglo American (AAL) 548.50p -1.24%

FTSE 250 - Risers

Allied Minds (ALM) 444.90p 7.13%
McCarthy & Stone (MCS) 250.30p 5.61%
Synthomer (SYNT) 343.90p 5.23%
Dechra Pharmaceuticals (DPH) 1,224.00p 3.29%
NCC Group (NCC) 253.00p 2.76%
Interserve (IRV) 459.00p 2.57%
Saga (SAGA) 185.20p 2.55%
Fidelity China Special Situations (FCSS) 131.00p 2.50%
Cable & Wireless Communications (CWC) 75.90p 2.43%
UK Commercial Property Trust (UKCM) 83.00p 1.90%

FTSE 250 - Fallers

Brown (N.) Group (BWNG) 340.60p -5.39%
Halfords Group (HFD) 404.00p -4.60%
Drax Group (DRX) 265.20p -4.09%
Polypipe Group (PLP) 337.30p -3.77%
Ocado Group (OCDO) 286.30p -3.76%
Supergroup (SGP) 1,430.00p -3.57%
Mitie Group (MTO) 268.50p -3.52%
Thomas Cook Group (TCG) 93.55p -2.86%
Grafton Group Units (GFTU) 712.50p -2.80%
Meggitt (MGGT) 406.60p -2.63%