FTSE 100 movers: Smiths Group surges on pension deal

London’s FTSE 100 index was up 1.2% to 17,052.80 at 1500 GMT, with Smiths Group pacing the advance as investors welcomed a deal to cut its pensions contributions.

Smiths Group was the standout gainer after its first quarter results showed resilience. The engineering group said sales declined only 4% as solid trading performances by the detection and medical businesses made up for most of the weak markets endured by its oil and gas customers.

As well as announcing that lower pension scheme contributions will lead to an extra £36m annualised free cash flow by 2017, the company's new chief executive Andy Reynolds Smith said expectations for the full year remained "broadly unchanged" and after meeting divisional chiefs and visiting major locations he saw "clear potential" for operational improvements across the business.

Aerospace and defence group Rolls-Royce was a high riser, in line with the rest of the sector, which benefited from growing expectations of a security spending blitz in Europe following the terrorist attacks in Paris.

EasyJet was under the cosh despite posting an 18% rise in full year pre-tax profit as revenue and passenger numbers grew, and expressing confidence over the long-term outlook for the business. Atif Latif, director of trading at Guardian Stockbrokers, noted a degree of disappointment as some investors had been hoping for a special dividend to be announced. Meanwhile, SpreadCo market analyst David Morrison said the selloff has much to do with Monday’s price action.

“Traders wanted to take the stock lower after the Paris attacks but held back because of today’s earnings release. Now that’s out of the way the stock can trade freely and there are fears of a price war hotting up. Ironically for EasyJet, it seems it’s better to travel than arrive,” he said.

Supermarket retailer Morrisons was in the red after Citigroup downgraded its stance on the stock to ‘sell’ from ‘buy’ and cut its price target to 130p from 225p. “In adopting a negative stance on the shares we acknowledge that the company’s balance sheet and free cash flow generation are strong but we are of the view that whilst this provides Morrison with flexibility, the recovery of its operating poise will be the key focus of the market.”

FTSE 100 - Risers

Smiths Group (SMIN) 1,012.00p 9.35%
Rolls-Royce Holdings (RR.) 555.00p 5.11%
Old Mutual (OML) 199.80p 4.28%
Hargreaves Lansdown (HL.) 1,494.00p 3.53%
Whitbread (WTB) 4,545.00p 3.32%
Royal Dutch Shell 'B' (RDSB) 1,639.50p 3.24%
Intertek Group (ITRK) 2,644.00p 3.16%
Royal Dutch Shell 'A' (RDSA) 1,623.00p 2.98%
GKN (GKN) 291.70p 2.93%
BG Group (BG.) 1,006.00p 2.92%

FTSE 100 - Fallers

easyJet (EZJ) 1,724.00p -3.31%
Anglo American (AAL) 443.55p -2.30%
Randgold Resources Ltd. (RRS) 3,996.00p -0.79%
SABMiller (SAB) 4,008.50p -0.20%
RSA Insurance Group (RSA) 436.80p 0.05%
Hikma Pharmaceuticals (HIK) 1,944.00p 0.15%
Imperial Tobacco Group (IMT) 3,598.00p 0.25%
Admiral Group (ADM) 1,628.00p 0.37%
Glencore (GLEN) 90.05p 0.57%
Morrison (Wm) Supermarkets (MRW) 154.70p 0.65%