FTSE 100 movers: Retailers fly while miners flounder
The FTSE 100 was keeping its head above the waterline in afternoon trading on Tuesday, with rising oil prices and positive retail figures driving trade.
Positive data from the British Retail Consortium helped push fashion retailer Next higher, with a warmer May seeing shoppers hit the streets with their wallets prised open just a little bit more than previously.
Figures from the BRC showed like-for-like sales rise 0.5% year-on-year on May, after falling sales in the previous two months, although the consortium warned that trade conditions remained tough for the sector.
“Clothing made a big comeback this month after suffering declines in April,” said BRC chief executive Helen Dickinson.
“This appears to be due to consumers waiting for just the right moment before embarking on their pre-summer spending.”
Another retailer on the up was luxury brand Burberry, which was also still riding a wave of approval from investors after its chief executive revealed he had taken a 75% pay cut.
On Monday, it was revealed boss Christopher Bailey’s pay had fallen to £1.89m from £7.51m in 2015 after a year of disappointing results, including a 10% slump in full-year pre-tax profit in May.
Off the high street, Shell was being rewarded after increasing the level of cost cuts from its merger with BG Group to $4.5bn from a previously stated $3.5bn.
In an update early on Tuesday, the company said it expected to “achieve and exceed the $3.5bn synergies prospectus commitment earlier than expected, in 2017, when synergies should be $4bn.”
Its board also said it expected capital investment for 2016 to be $29bn, excluding the purchase price of BG.
On the downside, Anglo American was sliding after having its ‘sell’ rating reiterated in a note from UBS.
Analysts at the broker said that the company appears to be making good progress with its restructuring, announcing the sale of Niobium and Phosphates for $1.5bn in April and with reports it will sell Moranbah & Grosvenor for a similar value.
“We reiterate our sell rating and believe the stock fully discounts the restructuring, trading at a 10% premium to our market restructure valuation of £6.27 per share.
“A more constructive commodity price outlook - especially platinum and diamonds - is needed to underpin the current share price,” UBS noted.
Fellow miners Antofagasta and Glencore rode the draft of Anglo American’s slide, also featuring among the top losers on Tuesday afternoon.
Insurance firm Direct Line was another stock under pressure, having received a hold note from Peel Hunt citing the possibility of an excess capital return to shareholders.
“As Direct Line moves towards an internal solvency model, capital requirements might decline, freeing up surplus in the process,” the broker noted, adding motor rate increases may further boost earnings.
“The attractive dividend yield - 7% including a special dividend - and close to sector multiples - average PE 13 times 2017 estimates - warrant a hold recommendation.”
FTSE 100 - Risers
Royal Dutch Shell 'A' (RDSA) 1,752.00p 3.00%
Royal Dutch Shell 'B' (RDSB) 1,759.00p 2.75%
Next (NXT) 5,485.00p 2.33%
Burberry Group (BRBY) 1,098.00p 1.76%
DCC (DCC) 6,435.00p 1.74%
BP (BP.) 373.55p 1.40%
Lloyds Banking Group (LLOY) 70.52p 1.26%
Travis Perkins (TPK) 1,877.00p 1.24%
Whitbread (WTB) 4,195.00p 1.21%
CRH (CRH) 2,106.00p 1.15%
FTSE 100 - Fallers
Antofagasta (ANTO) 437.20p -2.84%
Anglo American (AAL) 670.70p -2.32%
Glencore (GLEN) 141.80p -1.60%
SSE (SSE) 1,526.00p -1.55%
Direct Line Insurance Group (DLG) 370.10p -1.46%
Smith & Nephew (SN.) 1,173.00p -1.43%
Mediclinic International (MDC) 903.50p -1.31%
Informa (INF) 675.00p -1.24%
Tesco (TSCO) 157.25p -1.22%
Prudential (PRU) 1,330.50p -1.11%