FTSE 100 movers: Babcock boosted by RBC note, StanChart drops on divi disappointment

London’s FTSE 100 was down 0.2% to 7,407.55 in afternoon trade as investors sifted through earnings and mulled a disappointing reading on UK construction.

Paddy Power was on the front foot, likely benefiting from positive read-across from peer Wiliam Hill’s earnings.

Babcock was a high riser as RBC Capital Markets initiated coverage of the stock at ‘outperform’ with a 1,100p price target.

“Babcock appears to have been caught up in the wider UK outsourcing malaise. In our view, this 'guilty-by-association' view ignores the depth of its relationships with key clients and also its technical capabilities, something which sets it aside from other more generic plays,” the bank said.

Going the other way, Standard Chartered was under the cosh despite reporting an 82% jump in first-half profit, with analysts pointing to disappointment that the dividend was not reinstated early.

In the six months to the end of June, statutory pre-tax profit rose to $1.8bn, while operating income was up 3% at $7.2bn. Meanwhile, loan impairments fell to $655m from $1.5bn in the second half of 2016. However, the company declared no interim dividend, saying it will review the situation at the end of the year once more clarity has emerged regarding current regulatory uncertainties, including the capital implications of the finalisation of Basel III and the implementation of IFRS 9.

Rio Tinto was on the back foot. After slashing costs and selling assets, the company said it would return $3bn of cash to shareholders for the first half of 2017, but revenues, profits and the dividend came in shy of forecasts.

Packaging group Smurfit Kappa was down as weak containerboard supply and rising costs hit earnings.

RSA Insurance was in the red despite reporting a better-than-expected operating profit for the first half, as its dividend fell short of expectations. Operating profit increased to £360m from £312m in the same period a year ago, which was comfortably ahead of consensus forecasts of £338m, but the 6.6p per share dividend was below consensus expectations of 7p.

BAE Systems rallied after new chief executive Charles Woodburn presented a strong set of interim results, keeping the aerospace and defence group on an even keel and firing off a confident view on the outlook.

Risers

Old Mutual (OML) 202.80p 2.74%
ITV (ITV) 175.90p 2.57%
Provident Financial (PFG) 2,139.00p 2.39%
Paddy Power Betfair (PPB) 7,865.00p 2.14%
Babcock International Group (BAB) 863.50p 2.07%
Kingfisher (KGF) 302.50p 1.89%
TUI AG Reg Shs (DI) (TUI) 1,238.00p 1.56%
Morrison (Wm) Supermarkets (MRW) 245.00p 0.95%
Legal & General Group (LGEN) 271.40p 0.89%
Tesco (TSCO) 177.50p 0.88%

Fallers

Standard Chartered (STAN) 803.70p -5.02%
Rio Tinto (RIO) 3,393.00p -3.11%
Smurfit Kappa Group (SKG) 2,238.00p -2.95%
Rolls-Royce Holdings (RR.) 952.00p -2.76%
CRH (CRH) 2,599.00p -2.66%
RSA Insurance Group (RSA) 643.00p -2.13%
BAE Systems (BA.) 595.00p -1.98%
Antofagasta (ANTO) 926.50p -1.85%
BHP Billiton (BLT) 1,337.50p -1.83%
Ashtead Group (AHT) 1,631.00p -1.75%