FTSE 100 movers: IAG and Merlin provide lift

The FTSE 100 index shot off to a strong start but lost momentum before beginning a later push higher after midday.

Just before 1400 GMT the British benchmark was 0.36% higher at just under 5,845 points.

Leading the index higher was British Airways owner IAG, which took off on the back of a Merrill Lynch upgrade to ‘buy’ from ‘underperform’, as the shares have over-shot on the downside.

While admitting to being structurally bearish on European airlines' equity and credit, BofAML said it continued to "appreciate that even the most value-destructive companies can have ‘their day in the sun,’ particularly in these increasingly volatile times”.

It upgraded IAG ahead of a likely robust fourth quarter earnings update on Friday 26 February.

Madame Tussauds and Alton Towers owner and Merlin Entertainments was lifted by the appointment of pharma industry finance chief Anne-Françoise Nesmes to its board as chief financial officer from 1 August.

Succeeding Andrew Carr, who announced his intention to retire in January, Nesmes will join from FTSE 250 veterinary drug company where she has been since 2013, having joined from GlaxoSmithKline.

"We look forward to welcoming Anne-Françoise to the board later in the year. Her extensive finance and international experience will enable her to make a significant contribution to our business as we continue to grow," said Merlin chairman Sir John Sunderland.

BP and Shell were both higher as various reports emerged from oil producing states to offer encouragement that prices could stabilise, though significant oil price volatility continued with prices retreating after an initial spurt.

Russia, Saudi Arabia and Venezuela reportedly reached an agreement to keep oil output at current levels, contingent on obtaining the agreement of other major producers, with Iran apparently offered 'special' consideration to freeze their output at current levels, according to unconfirmed reports.

Goldman Sachs also weighed in on shares of Shell following its merger with BG Group, re-starting coverage of the stock with a recommendation to 'buy'.

A group of banking fallers were led by Standard Chartered, as analysts at Morgan Stanley and Investec downgraded the shares after their rally in recent days.

With economies slowing and commodity and property prices lower, the outlook for asset quality at Asian banks has deteriorated since the bank's strategic review, Morgan Stanley said.

As a result, cost estimates have been increased, bringing them to approximately 42% to 30% below the analyst consensus for StanChart's earnings per share in 2016 and 2017.

Investec added that, aside from a 17.2% rally in just two days, nothing much has changed and so recommend that investors take profits or cut losses.

"We happen to believe that Standard Chartered’s capital position will now prove adequate, supported by significant ongoing balance sheet de-risking initiatives.”

Anglo American's big results-and-restructuring announcement saw the shares slip lower by mid-morning but still well above January's long-term lows.

The diversified mining behemoth posted an attributable losses doubling of $5.6bn after $3.8bn of write-downs since the half year, on revenue down by close to a third to $23bn - though most financials were better than the City's consensus forecasts.

Restructuring went further than December's initial guidance, with nickel and metallurgical coal are now no longer core, with new moves launched to dispose of nickel, niobium and phosphates, with disposal processes for the Moranbah and Grosvenor metallurgical coal assets already under way, with "further progress" made on other previously announced disposal processes, including platinum and thermal and metallurgical coal operations in South Africa and Australia.

Chief executive Mark Cutifani plans to reap $1.9bn net benefits to EBIT in the coming year, with a 50% cut of central costs and 25% of capex to under $3bn as Anglo aims to keep net debt below $10bn by year-end and below $6bn in the medium term.

Having been downgraded to junk on Monday evening by Moody's, he also set a target net debt-to-EBITDA ratio of 2.5 times as it aims to drag its bonds back to an investment grade credit rating.

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 522.50p 3.57%
Merlin Entertainments (MERL) 413.70p 2.96%
Berkeley Group Holdings (The) (BKG) 3,220.00p 1.87%
BP (BP.) 338.85p 1.82%
Imperial Brands (IMB) 3,688.00p 1.53%
Sports Direct International (SPD) 396.60p 1.51%
Intertek Group (ITRK) 2,768.00p 1.50%
Royal Dutch Shell 'B' (RDSB) 1,563.50p 1.49%
Carnival (CCL) 3,195.00p 1.46%
British American Tobacco (BATS) 3,829.50p 1.44%

FTSE 100 - Fallers

Standard Chartered (STAN) 422.60p -6.72%
Anglo American (AAL) 374.00p -4.85%
Antofagasta (ANTO) 432.40p -2.35%
Aberdeen Asset Management (ADN) 224.10p -2.05%
Rio Tinto (RIO) 1,819.50p -1.70%
Barclays (BARC) 158.35p -1.49%
Shire Plc (SHP) 3,747.00p -1.32%
HSBC Holdings (HSBA) 440.70p -1.28%
BHP Billiton (BLT) 686.60p -1.01%
Land Securities Group (LAND) 1,015.00p -0.88%