FTSE 100 movers: Centrica rallies on results; Anglo slumps on credit downgrade

London’s FTSE 100 was down 0.9% to 5,977.71 at 1500 GMT as investors digested data showing Chinese inflation grew less than expected in January.

Anglo American was under the cosh after its credit rating was downgraded to junk for the third time this week, this time by Standard & Poor’s.

S&P cut the rating to BB from BBB- with a stable outlook. Fitch had cut it to BB+ from BBB- on Wednesday, while Moody’s had downgraded it three notches to Ba3 on Monday.

On Tuesday, the miner posted a pre-tax loss of $5.5bn after $3.8bn of writedowns since the half year, as it unveiled its promised “radical” overhaul to combat sinking commodity prices.

S&P said on Thursday: “Although the program will improve Anglo's overall competitive position, it will leave the company with a smaller, less-diversified portfolio.

“Because other companies are also seeking to divest assets at this time, we remain very cautious about the timing of any sales and the level of proceeds they will generate,” it added.

Pharmaceutical giants AstraZeneca and GlaxoSmithKline were firmly lower as they went ex-dividend, while Standard Life slipped ahead of its full year results on Friday.

British Gas owner Centrica bucked the trend. Although it reported a 15% drop in pre-tax profit for 2015 as revenue declined, earnings were ahead of expectations.

For the year ended 31 December, adjusted pre-tax profit fell to £1.13bn from £1.33bn in 2014, as revenue slipped 5% to £28bn.

Earnings per share of 17.2p were down 4% from the previous year, but ahead of analysts’ expectations.

Adjusted earnings fell to £863m from £903m the year before, surpassing expectations of around £852m.

Rolls-Royce was higher after JPMorgan Cazenove upgraded the stock to ‘neutral’ from ‘underweight’ and lifted the price target to 690p from 395p.

It said although many headwinds remain, news flow over the next six months is biased to the positive.

JPM said it had been expecting the aerospace and defence group to cut its guidance when it reported last week.

However, this was not the case and management was more prudent with its November 2015 guidance than JPM thought.

“We cannot rule out further EPS downgrades if macro conditions deteriorate, and/or certain industry trends deteriorate (eg. the number of parked RR aero engines increases); but this looks much less likely in the next six months,” JPM said.

Aerospace and defence group BAE Systems was in the black after posting full year results in line with City expectations and saying it expects underlying earnings per share to rise 5% to 10% this year as it enters what it says is an improved business environment.

For 2015, the company saw underlying earnings before interest, tax, depreciation and amortisation decline 1% to £1.68bn due to previously reported slow sales of its Eurofighter Typhoon fighter jets, though overall group sales were lifted almost 8% to £17.9bn, helped by a stronger dollar.

FTSE 100 - Risers

Centrica (CNA) 206.60p 6.44%
Rolls-Royce Holdings (RR.) 666.50p 5.54%
Berkeley Group Holdings (The) (BKG) 3,415.00p 3.61%
International Consolidated Airlines Group SA (CDI) (IAG) 541.50p 2.56%
Taylor Wimpey (TW.) 184.00p 2.45%
BAE Systems (BA.) 510.00p 2.14%
Barratt Developments (BDEV) 584.00p 2.10%
Persimmon (PSN) 2,032.00p 1.70%
Sainsbury (J) (SBRY) 265.70p 1.61%
Old Mutual (OML) 177.10p 1.55%

FTSE 100 - Fallers

Anglo American (AAL) 448.55p -4.17%
AstraZeneca (AZN) 4,116.50p -3.81%
GlaxoSmithKline (GSK) 1,372.00p -3.65%
Standard Chartered (STAN) 431.45p -3.32%
Rio Tinto (RIO) 1,898.50p -2.69%
Sports Direct International (SPD) 411.80p -1.86%
Royal Dutch Shell 'A' (RDSA) 1,614.50p -1.67%
Royal Dutch Shell 'B' (RDSB) 1,609.00p -1.65%
Hikma Pharmaceuticals (HIK) 1,881.00p -1.62%
Standard Life (SL.) 340.90p -1.56%