FTSE 100 movers: RBS gains but Unilever tanks as Kraft ditches takeover plans
London’s FTSE 100 was down 0.1% to 7,293.13 in afternoon trade, with volumes lighter than usual as US markets are closed for Presidents Day.
Royal Bank of Scotland rallied after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.
Aerospace and defence group Rolls-Royce advanced after Goldman Sachs upgraded it to ‘buy’ from ‘neutral’, lifting the price target to 1,030p from 743p and adding the stock to its ‘Conviction’ list, saying the company has the potential to substantially increase free cash flow between now and 2020.
Shares in Direct Line got a boost as the insurer said a change in the way lump-sum payouts are calculated will have less of an impact on the business than it previously thought.
The Lord Chancellor, Elizabeth Truss, is due to announce this month a review of the Ogden discount rate, used by courts to calculate lump sum compensation.
The rate has been set at 2.5% since 2001 and analysts are expecting it to be reduced to 1% or 1.5%.
On the downside, Unilever sank as Kraft Heinz ditched its plans to take over the Marmite owner, just two days after it emerged the London-listed consumer goods giant had rejected a $143bn offer.
Education publisher Pearson was under the cosh as Liberum highlighted concerns about the company’s cash flow.
Pearson, which is due to report full-year 2016 results on Friday, has already stated its headline results and given guidance for 2017, so Liberum said there shouldn’t be any major surprises.
“However, we expect the details of its 2016 results to concern the market particularly around cash flow. We also do not see further major cost savings as a risk to our sell case.”
Barratt Developments was weaker after FTSE 250 peer Bovis Homes reported a 3% drop in pre-tax profit as the company was forced to compensate customers for poorly built homes, and said it had begun a strategic review.
Risers
Royal Bank of Scotland Group (RBS) 258.50p 6.64%
Rolls-Royce Holdings (RR.) 703.00p 5.56%
Hammerson (HMSO) 586.50p 3.90%
Direct Line Insurance Group (DLG) 363.30p 2.66%
BT Group (BT.A) 322.75p 2.10%
Merlin Entertainments (MERL) 500.00p 2.08%
Glencore (GLEN) 326.05p 2.07%
Standard Life (SL.) 373.90p 1.82%
Prudential (PRU) 1,638.00p 1.49%
St James's Place (STJ) 1,106.00p 1.47%
Fallers
Unilever (ULVR) 3,514.50p -7.44%
Pearson (PSON) 645.00p -3.52%
Mediclinic International (MDC) 803.50p -2.96%
Imperial Brands (IMB) 3,729.00p -1.38%
Associated British Foods (ABF) 2,576.00p -1.26%
Coca-Cola HBC AG (CDI) (CCH) 1,965.00p -1.21%
Barratt Developments (BDEV) 515.00p -1.06%
Reckitt Benckiser Group (RB.) 7,028.00p -1.01%
Capita (CPI) 517.00p -0.96%
AstraZeneca (AZN) 4,555.00p -0.87%