FTSE 100 movers: Pharmas under the cosh but Prudential gains on results

London’s FTSE 100 index was flat at 6,848.44 in afternoon trade.

Pharmaceutical stocks were under the cosh following a couple of ratings downgrades in the sector.

Charles Stanley downgraded Hikma Pharmaceuticals to ‘buy’ from ‘strong buy’ saying the company’s new guidance suggests a profit downgrade of around 6% for full-year 2016.

Smith & Nephew slumped after Barclays cut the stock to 'equalweight' from 'overweight' because of recent disappointing results, risks from competitors and likely delays to earnings-enhancing initiatives.

Although it upped its price target very slightly to 1,240p from 1,230p, Barclays said it was "difficult to say at this point when we can expect S&N to generate the sustainable mid single-digit top line growth it is capable of and drive margins to levels in line with industry peers".

On the upside, Rolls-Royce was boosted by an upgrade to ‘equalweight’ from ‘underweight’ by Morgan Stanley, which pointed to increased confidence on cash.

In its note on the company back in June, MS had pointed out that there wasn’t much room to manoeuvre before Rolls might be at risk of a further credit rating downgrade by Standard & Poor’s.

However, the bank said that following better-than-expected first-half results, underpinned by XWB engines sold as spares at a cash profit, it sees an improved outlook for free cash and is no longer as concerned.

Prudential was on the front foot after it reported a better-than-expected increase in first-half operating profit, driven by double-digit growth in Asia.

The insurance giant posted a 6% jump in operating profit to £2.06bn, beating analysts’ estimates of around £1.88bn.

Risers

Rolls-Royce Holdings (RR.) 789.50p 3.41%
Prudential (PRU) 1,425.00p 2.37%
Randgold Resources Ltd. (RRS) 8,670.00p 2.06%
Legal & General Group (LGEN) 210.10p 1.99%
Smiths Group (SMIN) 1,338.00p 1.21%
GKN (GKN) 306.60p 0.92%
RSA Insurance Group (RSA) 511.50p 0.89%
London Stock Exchange Group (LSE) 2,844.00p 0.89%
Standard Life (SL.) 343.00p 0.88%
Fresnillo (FRES) 1,974.00p 0.87%

Fallers

Hikma Pharmaceuticals (HIK) 2,260.00p -1.74%
Smith & Nephew (SN.) 1,256.00p -1.72%
Carnival (CCL) 3,529.00p -1.67%
International Consolidated Airlines Group SA (CDI) (IAG) 401.50p -1.40%
Vodafone Group (VOD) 231.05p -1.35%
Berkeley Group Holdings (The) (BKG) 2,615.00p -1.32%
Schroders (SDR) 2,695.00p -1.17%
Pearson (PSON) 879.00p -1.12%
Royal Dutch Shell 'B' (RDSB) 1,973.00p -1.10%
BAE Systems (BA.) 520.00p -0.95%