FTSE 100 movers: ABF and retailers lead gains, Reckitt ralphs

Retailers led the FTSE 100 index higher on Tuesday as the squeeze on household real incomes was shown to be easing.

UK average weekly earnings rose 2.8% in the three months to February compared to the same period last year, figures from the Office for National Statistics showed on Tuesday morning. Excluding bonuses, average weekly earnings growth improved to 2.8% from 2.6% a month ago, as the Bank of England had forecast for the first half of 2018.

Both measures overtook consumer price inflation, which came in at 2.7% for February.

The update on wages is an encouraging one for retailers, said analyst Chris Beauchamp at IG, with Next, Tesco and Marks & Spencer were among the top risers. Tesco was still basking in the glow of its strong numbers from last week.

Also boosting the retail sector were numbers from Primark owner Associated British Foods, which was sanguine about prospects for its fast-fashion brand Primark despite weather-related disruption over the past few months.

"Investors appear to be giving the group a free pass on the numbers this morning, reasoning that better weather and an improvement in consumer spending could help cushion performance in coming months, even if some will continue to wonder why the firm bothers to hold on to its underperforming sugar business," said Beauchamp.

Rising highest of all London's blue chip stocks was Russian steel-maker Evraz after President Donald Trump's surprise move to decide late overnight to hold off on imposing additional sanctions on Russia for support of the Assad regime in Syria.

Trump reportedly declined to sign-off on proposed additional sanctions against Russia, contradicting the US ambassador to the UN, Nikki Haley. The White House moved to reassure Russia that sanctions were not on the table, characterising Haley’s comments as misstatements, with press secretary Sarah Huckabee Sanders saying: "the president has been clear that he’s going to be tough on Russia, but at the same time he’d still like to have a good relationship with them."

Evraz and other Russia-related stocks had been slammed last week by the imposition of economic sanctions by the US.

UBS says Trump's decision to hold off on imposing additional sanctions should also see the likes of BP benefit, reckoning the focus had shifted from the US to Russia and the move by Trump "should de-escalate the situation and reduce the risk of an aggressive response from Putin".

GKN was higher as Melrose Industries said its offer for the engineer will be declared wholly unconditional later this week, having received acceptances over more than 81% of the shares.

WPP shares were rebounding from their fall off the back of Sir Martin Sorrell's exit under a cloud, even though the company had taken another body-blow overnight, with credit rating agency Moody's downgrading its outlook for the group. Moody's revised its outlook for the advertising giant from stable to negative.

Standard Life Aberdeen, which has a strong emerging markets focus from the Aberdeen side, was lifted by positive gains reported by specialist EM asset manager Ashmore. Ashmore said net inflows were at their best level since June 2013.

The fallers were led by Reckitt Benckiser after it was downgrade to 'underperform' by Credit Suisse. Using market data, analysts saw evidence of volume declines being offset by higher selling prices and expressed particular concerned about RB's over-the-counter consumer health business, noting fewer science-based innovations and increased pressure from generics.

They slashed the target price to £55.5 from £63.0.

Market Movers

FTSE 100 (UKX) 7,215.53 0.24%
FTSE 250 (MCX) 19,798.15 0.13%
techMARK (TASX) 3,345.71 -0.12%

FTSE 100 - Risers

Evraz (EVR) 386.60p 5.86%
Associated British Foods (ABF) 2,689.00p 4.10%
GKN (GKN) 465.10p 3.29%
Mediclinic International (MDC) 606.40p 2.33%
Next (NXT) 5,180.00p 2.29%
Standard Life Aberdeen (SLA) 380.10p 1.96%
WPP (WPP) 1,130.95p 1.80%
Marks & Spencer Group (MKS) 280.90p 1.63%
Tesco (TSCO) 236.90p 1.37%
3i Group (III) 898.00p 1.33%

FTSE 100 - Fallers

Reckitt Benckiser Group (RB.) 5,814.00p -3.05%
Rolls-Royce Holdings (RR.) 855.80p -2.51%
Rentokil Initial (RTO) 268.20p -1.36%
British American Tobacco (BATS) 3,993.50p -1.22%
Imperial Brands (IMB) 2,414.50p -1.05%
Smurfit Kappa Group (SKG) 3,050.00p -0.72%
Paddy Power Betfair (PPB) 7,115.00p -0.70%
RSA Insurance Group (RSA) 642.40p -0.65%
United Utilities Group (UU.) 698.00p -0.63%
Compass Group (CPG) 1,442.50p -0.48%