FTSE 100 movers: Insurers gain while Unilever dives

The FTSE 100 index was up 0.11% to 7,172.34 in the late afternoon, led by Diageo and Royal Bank of Scotland.

British alcoholic beverages company Diageo was ahead as it reported a surge in half-year sales as it benefitted from favourable foreign exchange rates and was also bolstered by an improved performance in the US spirits market.

Royal Bank of Scotland was on the front foot as it confirmed it will take a further £3.1bn provisions to pay off a looming penalty in the US for its sale of residential mortgage-backed securities in the run up to the financial crisis. Analysts felt investors reacted well to the news as the expected fine was in the region of £4-4.5bn.

Engineer Smiths Group climbed as it completed the sale of Smiths Interconnect's Power business to private investment firm Dunes Point Capital for an enterprise value of £162m. This disposal is part of an ongoing corporate programme to focus the company's portfolio on market-leading scalable positions in its chosen markets and the proceeds will be reinvested in “attractive growth opportunities”.

Insurance company RSA Insurance was up as Credit Suisse selected the company as one of its top picks in a note on UK non-life insurance. Its stock was initiated at ‘outperform’ with a price target of 680p. “We see potential for the UK non-life insurers' earnings to beat market expectations through a mixture of self-help, top-line growth and margin progression, which should support solid dividend growth.” Rival insurer Aviva also gained on the back of the note.

Ashtead was lifted by read-across from US rival United Rentals, which overnight reported fourth-quarter results that beat expectations and a positive 2017 outlook. Analysts at Jefferies, which raised its target price to £19, noted that the London-listed Ashtead has lagged URI's blockbusting performance since Donald Trump's election win, with the improving US outlook positive for Ashtead's Sunbelt arm.

Leading the retreat was software company Sage despite its first quarter trading results coming in line with the group’s expectations. The company is confident of achieving guidance of at least 6% organic revenue growth for the year but announced the possible sale of its US payments business. Analysts at Numis said being merely broadly in-line was "modestly disappointing".

Unilever was on the back foot as it reported increased revenue that fell short of City expectations as the Anglo-Dutch consumer goods giant was affected by economic woes in Brazil and demonetisation in India, two of its largest markets, and expects the difficult market conditions to continue in 2017. "Something of mixed bag of results from Unilever with the deteriorating sales and particularly volumes through Q4 a concern and something for the more bearish to focus," said analyst Darren Shirley at Shore Capital. "However, the outperformance in core margin expansion which resulted in profits a little ahead of expectations is encouraging in our view."

Whitbread, the owner of Costa coffee and Premier Inn, was under the cosh despite reporting a rise in third quarter revenue putting it on track to meet full year expectations and its growth plans. Sales from Premier Inn grew 9.2% but the company’s restaurants business, which included Beefeater Grill and Brewer’s Fayre, reported that LFL sales fell 1.5%. Costa on the other hand generated sales growth of 12.5%.

Miners were lower, with Fresnillo off its highs from the previous day when it had announced its record gold and silver production for 2016, even though the miner experienced some delays in implementing its turnaround plan.

Antofagasta reversed earlier gains as it enjoyed a strong fourth quarter performance and kept cash costs for the year below its guided level. Gold miner Randgold Resources slumped as the price of the yellow metal fell by 0.83%.

Paper and packaging group Mondi dipped as it signed off on a €470m investment in modernisation and expansion of its Steti mill, which will increase capital expenditure in the three years to 2019. With the intention of lower energy costs and increase production, the move will lift annual capital expenditure to a range of €600-650m in 2017 and €800-850m in 2018.

Risers

Diageo (DGE) 2,231.50p 4.23%
Royal Bank of Scotland Group (RBS) 237.00p 4.18%
Ashtead Group (AHT) 1,652.00p 3.64%
Smiths Group (SMIN) 1,528.00p 2.41%
Shire Plc (SHP) 4,499.50p 2.15%
Carnival (CCL) 4,319.00p 2.03%
Hargreaves Lansdown (HL.) 1,357.00p 1.95%
Aviva (AV.) 486.60p 1.78%
RSA Insurance Group (RSA) 585.50p 1.56%
Taylor Wimpey (TW.) 167.60p 1.45%

Fallers

Sage Group (SGE) 603.00p -4.81%
Unilever (ULVR) 3,187.50p -4.81%
Smurfit Kappa Group (SKG) 2,065.00p -4.53%
Fresnillo (FRES) 1,366.00p -3.80%
Whitbread (WTB) 3,913.00p -3.60%
Associated British Foods (ABF) 2,387.00p -3.09%
Compass Group (CPG) 1,371.00p -2.21%
Randgold Resources Ltd. (RRS) 6,485.00p -2.19%
Antofagasta (ANTO) 840.00p -2.04%
Mondi (MNDI) 1,765.00p -1.84%