FTSE 100 movers: Direct Line gains on MS upgrade; ex-divs weigh

London’s FTSE 100 was down 0.1% to 6,812.69 in afternoon trade.

Direct Line was the standout gainer after Morgan Stanley upgraded the stock to ‘overweight’ from ‘equalweight’ and lifted the price target to 465p from 414p.

The bank said the company’s shift towards more own brands business and away from partnership business should lead to higher return on equity, greater customer retention and higher-quality earnings.

MS said that as commission costs decline and retention improves, the acquisition costs over the customer lifetime are lower, driving margins higher. It expects return on equity to rise from 16% in 2016 to 17.2% in 2019.

Intertek was in the black as Societe Generale upped its price target on the stock to 3,400p from 3,300p.

GlaxoSmithKline edged higher as it announced the start of a phase III development programme to investigate daprodustat for anaemia associated with chronic kidney disease.

The programme includes two studies evaluating the safety and efficacy of daprodustat compared to recombinant human erythropoietin.

Meanwhile, ASCEND-ND will enrol approximately 4,500 non-dialysis dependent subjects with anaemia associated with CKD, and will include patients either switching from or naive to an ESA.

National Grid, DCC, Carnival, Johnson Matthey and Mediclinic were all on the back foot as their stocks went ex-dividend.

Risers

Direct Line Insurance Group (DLG) 360.80p 3.56%
Ashtead Group (AHT) 1,498.00p 2.60%
Antofagasta (ANTO) 710.50p 1.36%
Intertek Group (ITRK) 3,219.00p 1.23%
Merlin Entertainments (MERL) 435.50p 1.21%
3i Group (III) 673.50p 1.20%
Smith & Nephew (SN.) 1,104.00p 1.10%
CRH (CRH) 2,675.00p 0.98%
Rolls-Royce Holdings (RR.) 676.50p 0.89%
GlaxoSmithKline (GSK) 1,517.50p 0.83%

Fallers

National Grid (NG.) 910.00p -2.33%
Babcock International Group (BAB) 938.00p -1.88%
DCC (DCC) 6,225.00p -1.58%
Carnival (CCL) 4,074.00p -1.50%
Travis Perkins (TPK) 1,404.00p -1.40%
Hargreaves Lansdown (HL.) 1,211.00p -1.22%
International Consolidated Airlines Group SA (CDI) (IAG) 445.20p -1.20%
Barratt Developments (BDEV) 471.30p -1.19%
Johnson Matthey (JMAT) 3,186.00p -1.18%
Mediclinic International (MDC) 724.00p -1.16%