FTSE 100 movers: NMC rallies on earnings upgrade; tobacco stocks drop

London's FTSE 100 was 0.2% higher at 7,294.30 in afternoon trade on Tuesday.

In terms of sector, miners were the best performers amid rising iron ore prices, with Rio Tinto, Antofagasta and BHP all higher.

NMC Health was the top performer after it upgraded its underlying revenue and earnings guidance for this year to reflect the impact of a healthcare joint venture with Saudi Arabia's state-run pension fund and consolidation of its earlier acquisition of Boston IVF.

"The JV is good news for NMC and should provide relief for investors accordingly - the deal has closed, the terms look largely as expected, the investment thus far limited and small guidance upgrade is welcome," Berenberg said in a note.

Marks & Spencer was in the green, having dropped sharply last week as it announced a discounted rights issue and dividend cut.

David Cheetham, chief market analyst at XTB, said that despite the strong share price performance on Tuesday, a look back at prior performance makes for "pretty grim viewing", with a six-month decline in the stock price of almost 20% and a near-40% drop seen in the past couple of years.

He said "a litany of mistakes" was to blame for this poor performance and while a demotion from the FTSE 100 in the upcoming quarterly reshuffle wouldn’t materially impact business operations, "it would likely do more damage to its weary investors and their holdings".

On the downside, British American Tobacco and Imperial Brands were weaker after data from Nielsen showed that US cigarette sales dropped 6.9% by value and 11.2% in volume in the four weeks to mid-May. This marked the biggest decline in at least four years.

AstraZeneca lost ground even as JPMorgan Cazenove reiterated its 'overweight' rating on the stock post recent pipeline developments.

"We continue to see Astra offering a mid-teens core earnings per share compound annual growth rate, which we see as undervalued, with the stock trading on circa 19x 2020e core EPS.

"We see shares re-rating to 22x, driven by delivery on top-line growth, margin expansion and pipeline news."

FTSE 100 - Risers

NMC Health (NMC) 2,622.00p 7.55%
Rio Tinto (RIO) 4,789.00p 3.17%
Kingfisher (KGF) 219.40p 2.76%
Melrose Industries (MRO) 173.20p 2.39%
Antofagasta (ANTO) 821.20p 2.39%
BHP Group (BHP) 1,840.80p 2.27%
Next (NXT) 5,910.00p 2.21%
Ocado Group (OCDO) 1,224.70p 2.06%
TUI AG Reg Shs (DI) (TUI) 755.80p 2.00%
Marks & Spencer Group (MKS) 251.20p 1.99%

FTSE 100 - Fallers

British American Tobacco (BATS) 2,873.00p -3.74%
Smurfit Kappa Group (SKG) 2,215.00p -1.82%
Spirax-Sarco Engineering (SPX) 8,710.00p -1.80%
Imperial Brands (IMB) 2,022.00p -1.32%
Lloyds Banking Group (LLOY) 57.75p -1.32%
AstraZeneca (AZN) 6,010.00p -1.30%
Evraz (EVR) 599.60p -1.15%
Hikma Pharmaceuticals (HIK) 1,735.00p -1.11%
Rentokil Initial (RTO) 376.00p -1.05%
SEGRO (SGRO) 696.60p -0.97%