FTSE 100 movers: Financial companies' rises offset IHG and utility falls

The FTSE 100 started the day on a high but slowly started to sink into the red, with the market down 4.22 (0.07%) by mid-afternoon to 6,349.61 despite a strong performance from financials.

Aberdeen Asset Management, Standard Chartered, Barclays and HSBC were all boosted by the risk of a US rate-rise in December following last week’s US jobs data.

CMC Markets’ Jasper Lawler said the consumer banks and fund managers were rallying as investors expect better lending margins once rates rise. “The surprisingly stable reaction in Asian markets to the idea of a US rate-rise brought on by the strong jobs report has helped Asian-focused Aberdeen Asset Management and Standard Chartered top the FTSE 100.”

Inmarsat also had a good start to the week after it signed its second major airline for its GX Aviation on-board internet service. The satellite communications services company announced it had signed a deal with Singapore Airlines, with the product being installed on its Boeing B777-300ER aircraft in the second half of 2016, followed by its Airbus A380-800s and A350-900s. It follows on from its 10-year contract with Lufthansa signed last month.

However the biggest loser of the day was InterContinental Hotels, after it said on Monday it is not considering a potential sale or merger of the company. It followed market speculation on Friday that it was mulling the possibility of a sale or merger, when Bloomberg had cited "people familiar with the matter" as saying that IHG was in discussions with financial advisers about whether to sell itself or merge with a competitor as the sector consolidates.

And utility groups took a major hit on the back of downgrades from a number of investment banks. Societe Generale cut its rating for United Utilities from 'buy' to 'hold', citing the recent strong share price performance and the recent rise in bond yields.

Centrica was the biggest of the utility fallers as it was also downgraded to 'hold' by HSBC from 'buy', and also had its target price lowered to 250p from 300p. Analysts at the bank said that the recent stock underperformance reflected a news vacuum for the company and a slide in commodities.

Water company Severn Trent dropped as Exane lowered its price target from 2240p to 1900p and downgraded it from 'neutral' to 'underperform'.

BHP Billiton was also in the red as it provided an update after Friday's news of the burst dam at a Brazilian iron ore mine co-owned by the company. BHP said its iron ore production guidance for the 2016 financial year is under review, while analysts said there was an extra financial cost to the company, both in terms of lost earnings and potential future liabilities, at a time when it is looking to bolster earnings to support dividends.

FTSE 100 - Risers

Aberdeen Asset Management (ADN) 358.80p 3.22%
Inmarsat (ISAT) 1,026.00p 2.09%
Standard Chartered (STAN) 625.30p 1.72%
Barclays (BARC) 236.25p 1.66%
HSBC Holdings (HSBA) 535.00p 1.36%
Rio Tinto (RIO) 2,312.50p 1.34%
Travis Perkins (TPK) 2,003.00p 1.32%
Schroders (SDR) 3,048.00p 1.13%
Prudential (PRU) 1,562.00p 1.10%
Kingfisher (KGF) 357.50p 1.07%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 2,677.00p -3.50%
Centrica (CNA) 217.90p -3.03%
Taylor Wimpey (TW.) 176.70p -2.64%
Severn Trent (SVT) 2,130.00p -2.52%
Intu Properties (INTU) 329.90p -2.11%
United Utilities Group (UU.) 937.50p -2.09%
Persimmon (PSN) 1,841.00p -2.07%
Barratt Developments (BDEV) 566.50p -1.90%
Smith & Nephew (SN.) 1,092.00p -1.80%
Glencore (GLEN) 113.95p -1.64%