FTSE 100 movers: DCC gains on update; gold miners slump
London’s FTSE 100 was up 0.3% to 6,749.77 in afternoon trade.
Irish distribution and outsourcing company DCC was the top gainer as it reported a 10.5% jump in half year revenue and announced the acquisition of a 97% stake in French natural gas group Gaz Europeen.
Marks & Spencer rallied as Citigroup upgraded the stock to ‘buy’ from ‘neutral’ and lifted the price target to 365p from 325p, saying downside was limited.
The bank said that while it remains cautious about the company’s strategy to sustainably reignite sales growth, it has become more confident about delivery on the UK store plan and sees opportunity on central cost savings.
In addition, Citi highlighted encouraging signs around full price clothing sales and said that despite the increased cash costs, the free cash flow yield is 6.5% in FY18E and 11% in FY19E, with a dividend yield of 6%.
Legal & General was on the front foot after announcing the completion of a £1.10bn pension buyout deal with Rolls-Royce.
Banks were on the up, with Barclays and RBS both higher as US Treasury yields surged.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: “The US 30-year yields hit 3% for the first time since January, leading banks to see the end of the tunnel, as higher yields finally suggest a period of relief for financial services sector that has seen its revenues heavily squeezed by the low-to-negative yield environment over the past years.”
Polymetal, Randgold Resources and Fresnillo were on the back foot with gold prices weaker as the dollar gained ground amid rising inflation expectations. A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.
Utilities National Grid, SSE, Severn Trent and Centrica were all in the red as the defensive sector was shunned in favour of cyclicals, with the sharp rise in bond yields also weighing.
Primark owner Associated British Foods declined as Barclays maintained its ‘equalweight’ rating on the stock until greater clarity on UK high street trading trends becomes apparent.
Risers
DCC (DCC) 6,295.00p 4.31%
Marks & Spencer Group (MKS) 339.10p 3.64%
Barclays (BARC) 208.95p 3.57%
Capita (CPI) 568.50p 3.27%
Royal Bank of Scotland Group (RBS) 208.00p 3.17%
Tesco (TSCO) 204.50p 3.05%
Wolseley (WOS) 4,623.00p 2.78%
Legal & General Group (LGEN) 235.90p 2.61%
Prudential (PRU) 1,514.50p 2.50%
Aviva (AV.) 463.00p 2.50%
Fallers
Polymetal International (POLY) 802.00p -4.12%
National Grid (NG.) 927.20p -2.98%
Associated British Foods (ABF) 2,523.00p -2.89%
Mediclinic International (MDC) 739.50p -2.83%
SSE (SSE) 1,442.00p -2.76%
Severn Trent (SVT) 2,120.00p -2.62%
United Utilities Group (UU.) 856.00p -2.62%
Randgold Resources Ltd. (RRS) 5,800.00p -2.60%
Fresnillo (FRES) 1,403.00p -2.23%
Centrica (CNA) 200.60p -1.47%