FTSE 100 movers: BT dodges bullet, BP bid rumours resurface

London's blue chips enjoyed a stronger end to the week, with BT and BP topping the leaderboard on Friday's session.

The FTSE 100 was up 0.5% to just above 7.350 late on in the day.

BT Group rallied as it agreed to legally separate its Openreach infrastructure arm, but as it will still retain legal ownership of the assets and keep the unit within the wider group, analysts and investors felt it had dodged a bullet.

"The regulator could have forced BT to shed the infrastructure part of the business completely to address concerns around competition," said analyst Neil Wilson at ETX Capital.

But for consumers it was also good news, said Dan Howdle of Cable.co.uk, as the average broadband, TV and phone customer will enjoy "all the benefits the stoking of competition in a fairer marketplace is likely to bring, without suffering the costs and delays to infrastructural rollout a full separation would have incurred".

He added: "We should not, however, rule out a full separation happening at some point in the future."

BP was up as one of the Square Mile’s favourite rumours, that of US giant Exxon eyeing a bid for its British rival, re-emerged as an additional support for the shares.

Even so, the shares were helped by crude oil steadying after the big falls earlier in the week.

Chris Beauchamp, chief market analyst at IG, said oil's recent outlook, until the plunge in crude prices this week, made BP look more attractive once the weaker pound is taken into account.

"This is one deal that won’t escape the regulator however, and it will also be a tough one for Downing Street. Do they play the ‘global buccaneering free trade UK’ card, or the ‘sacred national interest’ one? While the shares have rallied 3.5%, the limited gains on such a remarkable story suggest that, for now, traders remain sceptical that BP is about to depart the scene," he said.

Intertek, the inspection, product testing and certification outfit, was boosted by HSBC raising its target price on the shares sharply higher, though it enumerated a long list of potential headwinds the company might face. Interket has been hit by poor demand from the resources sector and organic sales growth was in fact 0.2% down during the second half of 2016 - despite favourable FX.

Several real estate investment trusts were among the main fallers, with yields on 10-year gilts were up two basis points on Friday.

Hammerson, which invests in and develops shopping centres, and British Land, which is split evenly between retail and leisure assets and offices and residential, were in this group.

But leading the fallers was Intu Properties, which had also exchanged and completed contracts to acquire Xanadu shopping centre in Madrid, Spain, for a total cash consideration of €530m, before working capital and other adjustments.

An added negative for these retail-exposed REITs was a new survey that found UK high streets retailers endured their worst February since 2009 as consumers begin to feel the squeeze amid rising inflation.

UK like-for-like sales fell 2.2%, according to BDO's monthly tracker survey, which was the third month in a row of negative growth.

FTSE 100 - Risers

BT Group (BT.A) 343.05p 3.89%
BP (BP.) 470.40p 3.61%
Paddy Power Betfair (PPB) 8,805.00p 2.15%
Intertek Group (ITRK) 3,856.00p 1.66%
Morrison (Wm) Supermarkets (MRW) 234.60p 1.65%
Direct Line Insurance Group (DLG) 346.20p 1.58%
Tesco (TSCO) 189.35p 1.58%
Royal Dutch Shell 'B' (RDSB) 2,213.00p 1.51%
Sainsbury (J) (SBRY) 266.20p 1.45%
Carnival (CCL) 4,552.00p 1.43%

FTSE 100 - Fallers

Intu Properties (INTU) 278.10p -1.45%
WPP (WPP) 1,698.00p -1.39%
Capita (CPI) 541.50p -1.37%
Hammerson (HMSO) 582.00p -1.27%
RSA Insurance Group (RSA) 592.00p -1.17%
British Land Company (BLND) 615.50p -1.05%
Dixons Carphone (DC.) 303.90p -0.91%
International Consolidated Airlines Group SA (CDI) (IAG) 566.00p -0.88%
Randgold Resources Ltd. (RRS) 6,875.00p -0.87%
BAE Systems (BA.) 637.50p -0.86