FTSE 100 movers: BAT leads tobacco shares higher; Intercontinental Hotels drops

The FTSE 100 Index fell 0.05% to 7,023.83 in the late afternoon.

Tobacco firms British American Tobacco and Imperial Brands were boosted after BAT made an offer for the 57.8% of Reynolds American which it does not already own. “News that British American Tobacco offered to buy Reynolds American triggered a rally in the sector, also sending Imperial Brands higher in London,” said senior market analyst Ipek Ozkardeskaya from London Capital Group.

Informa got a boost on Friday as Berenberg upgraded the stock to ‘buy’ from ‘hold’ and lifted the price target to 800p from 740p. It said the company’s strategy of portfolio improvement has delivered greater progress than investors give it credit for.

Rio Tinto shares pushed up after Macquarie maintained its ‘outperform’ rating and lifted its price target on the stock by 3% to 3,400p. “RIO’s 3QCY16 production result was mixed. Western Australia iron-ore shipments were in line with our expectations while bauxite, coking coal and thermal coal all beat our estimates. Copper production was the weak spot.”

Burberry shares rose to their highest level in almost eight months after the Betavilla financial blog said Coach is considering merging with the company. “We always imagined that if Burberry were to arm itself with a handbag it would be a Mulberry one. If rumours that US bag maker, Coach, is looking at a merger with Burberry prove true, having sent the stock up 4.4% today, our dreams of Bur-Bags and Mul-Macks may never come to fruition,” said Nicholas Hyett from Hargreaves Landsdown.

However, Reuters later cited sources familiar with the matter as saying that the two companies were not in active merger talks.

Meanwhile Intercontinental Hotel Group slumped after reporting a fall in revenues in the third quarter, affected by volatility in foreign exchange markets.

Risers

Burberry Group (BRBY) 1,539.00p 6.14%
Mediclinic International (MDC) 916.00p 2.58%
British American Tobacco (BATS) 4,925.50p 2.55%
Imperial Brands (IMB) 3,958.50p 2.50%
Informa (INF) 682.50p 2.17%
Pearson (PSON) 777.50p 1.57%
Royal Bank of Scotland Group (RBS) 189.00p 1.45%
Rio Tinto (RIO) 2,648.00p 1.13%
Reckitt Benckiser Group (RB.) 7,217.00p 1.02%
Babcock International Group (BAB) 1,025.00p 0.99%

Fallers

Direct Line Insurance Group (DLG) 347.50p -2.06%
Johnson Matthey (JMAT) 3,439.00p -1.94%
Shire Plc (SHP) 5,046.00p -1.54%
easyJet (EZJ) 921.50p -1.39%
InterContinental Hotels Group (IHG) 3,182.00p -1.33%
Prudential (PRU) 1,380.00p -1.29%
British Land Company (BLND) 602.00p -1.15%
Royal Mail (RMG) 491.10p -1.11%
Ashtead Group (AHT) 1,329.00p -1.04%
ITV (ITV) 171.40p -1.04%