FTSE 100 movers: Jakarta bombs force IHG to fall

After a mostly positive week, the FTSE 100 was down 100.16 points (1.68%) to 5,860.81 by mid-afternoon Thursday.

InterContinental Hotels Group led the fallers, with TUI AG also featuring in the bottom 10 after a series of bomb blasts rocked Jakarta.

A Canadian and an Indonesian were killed and a number of people wounded by the explosions, which happened at a number of locations including a shopping centre near the presidential palace and UN offices. Islamic State has since claimed responsibility for the attacks. IHG has nine hotels in the Indonesian capital.

Merlin Entertainments took a hit after JP Morgan Cazenove downgraded the company’s rating from ‘neutral’ to ‘underweight’ on valuation grounds. In a note on the leisure sector, it said forecasts for the sector of earnings per share growth of 8% for this calendar year “imply that a degree of re-rating will be necessary to achieve this performance”. TUI AG was also downgraded from ‘overweight’ to ‘neutral’ in the same note.

Tesco shares were up after it posted an impressive like-for-like sales improvement following another decline in the third quarter.

Group LFL sales bounced back with a 2.1% rise in the six weeks to 9 January, with the UK LFLs climbing 1.3% as the prior year's three '£5 off £40' national coupon campaign was abandoned. Investors will hope this indicates Tesco has turned over a new leaf, rather than being just a flash in the pan, as the prior 13-weeks to 28 November saw UK sales decline to 1.5%, though this still beat market forecasts. Over the full 19 weeks to 9 January, LFLs grew by 0.4%, though at actual currency rates, sales declined 2.2%. Chief executive Dave Lewis put the Christmas improvement down to lower prices, a strong product range and much improved customer service.

BHP Billiton surged after Citigroup upgraded the company to ‘buy’ and cut the price target to 750p following the steep fall in the share price and despite downgrades to iron ore and gas prices.

The bank said there are still risks, from the fallout of the Samarco dam burst and volatile commodity prices, “but board/management need to act boldly to stave off these risks by cutting the dividend and capex as we've done in our forecasts to prevent issues snowballing and putting the balance sheet at risk”. Citi halved its dividend forecasts to a sustainable but still attractive yield of around 6% and reduced capex to $5bn by full year 2018, which it said was more than enough to balance the budget even at spot.

FTSE 100 - Risers
Anglo American (AAL) 244.65p +5.70%
Tesco (TSCO) 165.00p +4.23%
Glencore (GLEN) 74.85p +4.15%
BHP Billiton (BLT) 638.30p +3.02%
Smiths Group (SMIN) 908.50p +1.79%
Sainsbury (J) (SBRY) 251.40p +1.49%
Rio Tinto (RIO) 1,706.50p +1.37%
BP (BP.) 339.70p +1.15%
Pearson (PSON) 707.00p +0.93%
Fresnillo (FRES) 698.00p +0.87%

FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 2,333.00p -6.23%
Carnival (CCL) 3,681.00p -5.59%
Hikma Pharmaceuticals (HIK) 2,093.00p -5.34%
Merlin Entertainments (MERL) 408.00p -5.07%
Ashtead Group (AHT) 992.50p -4.84%
TUI AG Reg Shs (DI) (TUI) 1,197.00p -4.70%
Inmarsat (ISAT) 1,063.00p -4.32%
Taylor Wimpey (TW.) 190.60p -4.22%
Aberdeen Asset Management (ADN) 233.00p -4.12%
Johnson Matthey (JMAT) 2,469.00p -4.04%