FTSE 250 movers: Kaz and Vesuvius lead midcaps lower

By mid-afternoon on Thursday, the FTSE 250 was down 0.41%, amplifying the falls of its blue chip brother as weakening oil and copper prices undermined earlier index gains.

The biggest faller in the mid cap index was Kaz Minerals as it was downgraded among a wider JP Morgan Cazenove note reviewing the metals and mining sector. JPM recommended selling the recent rally and cut Kaz to ‘underweight’ from ‘neutral’, it lifted the price target to 125p from 105p.

On the sector, the bank noted Chinese demand growth is slowing, oversupply is rising and previous super-cycles suggest spot prices could carry a further downside risk of around 33%.

“Our recommendations already reflect this bearish view, but as we move beyond typical Q1 seasonal demand strength and with the UK mining sector +42% from its January 2016 lows, we recommend selling the recent rally.”

Zoopla was another share hit by negative sell-side opinion as UBS cut the property website to a 'neutral' recommendation from 'buy' due to continued competitive pressures from rival OnTheMarket.

UBS said its Evidence Lab research team had unearthed data on the UK property portal marketplace that indicated estate agency collective OnTheMarket had continued its momentum in 2016, growing 6.8%, ahead of Rightmove's 1.1% and Zoopla's 0.7%, as well as increasing its share of app downloads.

"We maintain our view that OTM is unlikely to be a major long-term player, but remain for the number two player Zoopla, which has been more impacted since OTM's launch."

Also, many stocks were lower after going ex-dividend, led by Vesuvius, International Personal Finance and BBA Aviation.

Looking to the risers, Egyptian gold miner Centamin was top of the tree, after it said first quarter production from its Sukari operation rose 6.5% compared with the previous period to 125,268 ounces, putting it well on track to meet its full year production guidance of 470,000 ounces.

Quarterly throughput at the process plant was 2,876kt, a 4.3% increase on the previous quarter and above Centamin's base case target rate of 11m tonnes per annum (Mtpa).

Analysts at SP Angel said it was a "very good result", especially since the first half was supposed to be the weaker, lower grade half, as open pit grades recover from 2015 levels of under 0.8g/t back towards the reserve grade of 1.05g/t.

Across in the retail sector, home furnishings specialist Dunelm boosted its shares with news of revenue for the third quarter increasing by 5.9%. Total like-for-like growth, combining like-for-like stores and home delivery, increased by 1.1%.

Analyst Freddie George at Cantor Fitzgerald was impressed. "The new management team led by John Browett will, we believe, give the business new vigour helped by the unveiling of eight new initiatives."

Although he acknowledged the stock was relatively expensive at 18.2 times 2016 earnings forecasts, he reiterated his 'buy' recommendation and target price of 1,100p.

"The company’s strong cashflow, however, should enable the company to continue paying special dividends, four in the last four years."

Sophos was up after being tipped by UBS as a 'buy' with a target price 300p within a wider sector note, as the company sits in what analysts regard as an attractive, $15bn sub-set of the $35bn security software market that is growing at a blended 7% per year.

After billings growth slowed to 17% constant currency in the third quarter from 24% in the second, analysts anticipate a further slowdown to 12% as comparatives get more difficult.

"However, this would still put Sophos at 18% constant currency growth for the year, in-line with the outlook for 'high-teens to 20%' growth."

Market Movers

FTSE 100 (UKX) 6,155.02 -0.11%
FTSE 250 (MCX) 16,796.48 -0.41%
techMARK (TASX) 3,152.17 0.27%

FTSE 250 - Risers

Centamin (DI) (CEY) 96.20p 6.24%
AA (AA.) 269.50p 4.54%
Sophos Group (SOPH) 223.60p 4.34%
NMC Health (NMC) 1,119.00p 3.80%
St. Modwen Properties (SMP) 310.80p 3.26%
Electrocomponents (ECM) 276.30p 3.10%
Vedanta Resources (VED) 342.20p 3.04%
Atkins (WS) (ATK) 1,404.00p 3.01%
Dunelm Group (DNLM) 936.00p 2.86%
Elementis (ELM) 243.50p 2.53%

FTSE 250 - Fallers

Kaz Minerals (KAZ) 150.10p -6.13%
Vesuvius (VSVS) 298.00p -4.97%
Aldermore Group (ALD) 196.80p -4.51%
International Personal Finance (IPF) 268.80p -4.21%
Zoopla Property Group (WI) (ZPLA) 250.40p -3.84%
Allied Minds (ALM) 408.70p -3.84%
BBA Aviation (BBA) 191.50p -3.62%
Ocado Group (OCDO) 330.10p -3.31%
Euromoney Institutional Investor (ERM) 922.00p -3.10%
Redrow (RDW) 396.10p -3.06%