FTSE 100 movers: Downgrades dent United Utilities, BP, Shell

London's FTSE 100 was up 0.1% to 7,357.36 in afternoon trade as the pound fell back below $1.30 after the latest data from the Office for National Statistics confirmed that UK growth slowed significantly in the first quarter.

United Utilities fell after Credit Suisse cut its rating to 'underperform' from 'outperform' and slashed the price target to 850p from 1,000p.

"UU's outperformance is wholly dependent on financing, leaving the company most vulnerable to strengthening operational incentives and a lower baseline WACC allowance. We see risk of penalties for underperforming on TOTEX allowances over 2015-20 and of further disputes with OFWAT on the upcoming submissions for 2020."

Retailer Next lost ground as Barclays highlighted some challenges. The bank noted that over the past few years, concern over the decline of bricks-and-mortar retailers has increased on falling profits and store closures. It said the US market provides a particularly bleak example with several major retailers rationalising their store estates given slowing footfall and/or declining profits.

The bank explored the US experience to see how it applies across the pond, specifically to Next.

"Next is at significant risk of going through what many of its US peers have gone through over the past 10 years, including lower sales and shrinking margins. Thus, we reduce our sales and margin assumptions for Next for the next three years and maintain our underweight rating," it said.

Oil giants BP and Shell were under pressure after Kepler Cheuvreux downgraded both stocks. It cut Shell to 'hold' from 'buy' and BP to 'reduce' from 'hold' as it reduced the long-term oil price from $60 to $50 and said it expects US output to grow by 1 million barrels per day on average over the 2017-20 period, exceeding OPEC and non-OPEC efforts.

Risers

St James's Place (STJ) 1,193.00p 1.88%
easyJet (EZJ) 1,372.00p 1.86%
Standard Life (SL.) 402.30p 1.85%
Whitbread (WTB) 4,009.00p 1.78%
TUI AG Reg Shs (DI) (TUI) 1,126.00p 1.53%
Burberry Group (BRBY) 1,678.00p 1.51%
Mediclinic International (MDC) 744.50p 1.50%
RSA Insurance Group (RSA) 619.50p 1.47%
Ashtead Group (AHT) 1,603.00p 1.39%
Schroders (SDR) 3,121.00p 1.36%

Fallers

United Utilities Group (UU.) 877.50p -2.34%
Micro Focus International (MCRO) 2,251.00p -1.49%
Tesco (TSCO) 169.75p -1.31%
Next (NXT) 3,925.00p -1.28%
Royal Bank of Scotland Group (RBS) 249.80p -1.23%
Fresnillo (FRES) 1,487.00p -1.06%
Severn Trent (SVT) 2,204.00p -0.94%
ITV (ITV) 181.40p -0.77%
Royal Dutch Shell 'B' (RDSB) 2,079.00p -0.74%
BP (BP.) 446.60p -0.73%