FTSE 100 movers: RBS, Lloyds slump on DB downgrade; Randgold rallies

London’s FTSE 100 index was down 0.2% to 6,880.76 in afternoon trade.

RBS and Lloyds Banking Group slumped as Deutsche Bank downgraded the stocks to adjust for a “lower-for-longer” environment.

Deutsche downgraded RBS to ‘sell’ from ‘hold’ and cut the price target to 170p from 200p. It said the bank was most at risk in the near/medium term due to already-low deposit rates (36bps), likely downgrades to loan growth, additional restructuring charges and the likely lack of a dividend until 2018.

It cut Lloyds to ‘hold’ from ‘buy’ and trimmed the price target to 59p from 60p saying that while the bank should benefit in the near term from falling deposit costs and potential sub-debt redemptions, there are risks from re-mortgage churn in the medium to longer term.

On the upside, Randgold Resources was the standout gainer after Numis upgraded the stock to ‘buy’ from ‘hold’, saying it expects the third quarter results to show operational improvements. The brokerage forecasts a rise in production at the Tongon mine to 78,000 ounces from 50,000 ounces.

It also expects production at the Kibali mine in the Democratic Republic of the Congo to stabilise with increased ore.

Morrisons was also in the black after the supermarket group implemented a new round of 12% price cuts to 160 everyday items.

The company's rolling 'price crunch' programme this week cut prices on meat and poultry products ranging from lamb shoulder and gammon joints to thin cooked ham and Brussels pate, as well as vegetables including carrots, broccoli, potatoes and tomatoes.

Yorkshire-based Morrisons announced the price cuts would cover close to 130 top-selling cooked meat, fresh meat and poultry products, along with more than 30 fruit and vegetable lines.

In terms of sectors, miners got a boost following encouraging data from China, which is a big consumer of metals. The Caixin services purchasing managers’ index nudged up to 52.1 in August from 51.7 in July. Anglo American, BHP Billiton and Fresnillo were all on the front foot.

Risers

Randgold Resources Ltd. (RRS) 7,645.00p 2.41%
Paddy Power Betfair (PPB) 9,185.00p 1.89%
CRH (CRH) 2,580.00p 1.69%
Anglo American (AAL) 820.00p 1.49%
BAE Systems (BA.) 555.00p 1.28%
BHP Billiton (BLT) 1,007.00p 1.16%
Royal Dutch Shell 'A' (RDSA) 1,892.00p 1.15%
Fresnillo (FRES) 1,687.00p 1.14%
Royal Dutch Shell 'B' (RDSB) 1,974.50p 1.10%
Morrison (Wm) Supermarkets (MRW) 199.10p 1.07%

Fallers

Royal Bank of Scotland Group (RBS) 198.00p -3.08%
Provident Financial (PFG) 3,022.00p -2.52%
Intu Properties (INTU) 306.40p -1.92%
Lloyds Banking Group (LLOY) 59.84p -1.82%
Imperial Brands (IMB) 4,061.50p -1.66%
Worldpay Group (WI) (WPG) 293.60p -1.54%
Coca-Cola HBC AG (CDI) (CCH) 1,670.00p -1.47%
Whitbread (WTB) 4,236.00p -1.24%
British American Tobacco (BATS) 4,806.50p -1.22%
Berkeley Group Holdings (The) (BKG) 2,717.00p -1.16%