FTSE 100 movers: Randgold drops on downgrade; Old Mutual jumps on break-up reports

London’s FTSE 100 was down 1% to 6,137.91 at 1425 GMT as commodity stocks were hit by declining prices, but Old Mutual shares surged.

Randgold Resources was the biggest loser after Morgan Stanley cut its rating on the stock to ‘equalweight’ from ‘overweight’. The bank noted Randgold’s shares are up 53% year-to-date and said it was time to take profits. In addition, it said the stock looks fully valued and implies metal prices that are far above spot leaving the risk-reward skewed to the downside.

Standard Chartered was under the cosh after Moody’s downgraded its rating on the emerging markets-focused bank’s long-term debt by one notch to Aa2. It pointed to expectations the lender’s profitability would remain weak over the next two years and the challenging environment in some of the markets in which it operates.

The agency said: "The group is implementing a number of initiatives to reduce its credit risk and restore its profitability, including a reduction in risky exposures and a downsizing of its operations in some of its less profitable markets.

"However, Moody's expects profitability to remain weak for at least two years, and the operating environment in some of the markets in which Standard Chartered operates has become more challenging."

Investment group Old Mutual was the standout gainer after it responded to recent press speculation by saying that all options for it strategic review are being considered but no decision has been made yet.

Media reports over the weekend suggested the company could be preparing a £9n break-up.

“Investors will be hoping that it’s a case of 2+2=5 with the individual assets of the company (4 divisions; 40% stake in Nedbank retail, Wealth, Emerging Markets, Institutional Asset Management) being worth more on a stand-alone basis than whilst held together,” said Mike van Dulken, head of research at Accendo Markets.

“Some might argue the timing is rather fortuitous just days before results, getting the shares back to the 200p mark last traded in early December. It also closes the December gap down when South Africa-exposed stocks were hurt by the ousting of the country’s finance minister, stoking scepticism among foreign investors.”

Advertising agency WPP was also on the front foot after it acquired a majority stake in the holding company of digital agency Potato through its digital services agency, AKQA.

London-based Potato, whose clients include Google and Canon, specialises in designing and building complex, secure and scalable web applications.

For the year ended 31 March 2015, the company’s revenues were £6.9m, with gross assets of £4.1m.

Risers

Old Mutual (OML) 191.50p 6.57%
St James's Place (STJ) 881.00p 2.56%
WPP (WPP) 1,556.00p 1.63%
Rio Tinto (RIO) 2,161.00p 1.46%
ITV (ITV) 233.90p 1.39%
Persimmon (PSN) 2,017.00p 1.26%
Coca-Cola HBC AG (CDI) (CCH) 1,400.00p 1.01%
Intertek Group (ITRK) 3,121.00p 0.94%
BHP Billiton (BLT) 875.50p 0.89%
Standard Life (SL.) 354.60p 0.77%

Fallers

Randgold Resources Ltd. (RRS) 6,350.00p -4.01%
Glencore (GLEN) 154.20p -3.63%
Worldpay Group (WI) (WPG) 290.60p -3.17%
BP (BP.) 356.45p -3.11%
Royal Dutch Shell 'B' (RDSB) 1,636.00p -2.91%
Standard Chartered (STAN) 472.10p -2.88%
Aberdeen Asset Management (ADN) 278.80p -2.52%
Royal Dutch Shell 'A' (RDSA) 1,635.50p -2.50%
Merlin Entertainments (MERL) 444.70p -2.50%
Hikma Pharmaceuticals (HIK) 1,748.00p -2.46%