FTSE 100 movers: Banks rally on Deutsche note; Ocado drops

London’s FTSE 100 was down 0.2% at 6,901.46 in afternoon trade on Monday.

Online supermarket Ocado, which has benefited from lockdowns and restrictions, was weaker as lockdown easing began in England, with non-essential shops and pubs and restaurants with outdoor spaces reopening.

Other retailers were also under pressure, with B&Q owner Kingfisher, Next and B&M all weaker.

CMC Markets analyst Michael Hewson said: "Both the FTSE100 and FTSE250 have slipped back from last week’s peaks, with some profit taking coming through in the retail sector after several weeks of gains, while markets in France and Germany have been similarly subdued as investors take a pause in a week that will see some important economic reports out of China and the US.

"We’ve seen declines in the likes of ASOS and AO World, who do all of their business online, down sharply as non-essential retail shops reopen, with Ocado also feeling the draught.

"The weakness hasn’t just been confined to online retailers with the likes of Kingfisher, Next, B&M European retail, JD Sports and Primark owner Associated British Foods all lower on the day in what looks suspiciously like a classic case of buying the expectation of the re-opening, and taking some profit on the fact."

On the upside, banks were on the rise on the back of a note by Deutsche Bank, which upgraded Lloyds to ‘buy’ from ‘hold’ and lifted its price targets on Barclays, NatWest, HSBC and Standard Chartered.

"UK rates have risen much faster than their European counterparts yet have left some UK bank share prices lagging behind," said DB. "UK banks have ramped up rate sensitivity with perfect timing before a sharp steepening in the yield curve. We increase our profit before tax estimates by 17% for 2021 to reflect the better asset quality; and by 8% for 2023 to reflect the steeper yield curve.

"We expect a good Q1 results season on this basis and expect consensus upgrades. At current share prices, we see 18% upside potential at UK banks - we upgrade Lloyds to buy to join Barclays, Virgin Money and Standard Chartered."

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 44.36p 2.55%
Barclays (BARC) 189.32p 1.95%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,358.00p 1.84%
Admiral Group (ADM) 3,202.00p 1.65%
BP (BP.) 299.40p 1.49%
Severn Trent (SVT) 2,441.00p 1.45%
Royal Dutch Shell 'A' (RDSA) 1,413.40p 1.26%
Intermediate Capital Group (ICP) 1,992.00p 1.22%
Aviva (AV.) 409.50p 1.21%
NATWEST GROUP PLC ORD 100P (NWG) 198.95p 1.17%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,086.00p -2.98%
Kingfisher (KGF) 333.80p -2.94%
Rightmove (RMV) 601.00p -2.81%
Rolls-Royce Holdings (RR.) 109.14p -2.45%
Next (NXT) 8,134.00p -1.95%
GlaxoSmithKline (GSK) 1,294.00p -1.94%
B&M European Value Retail S.A. (DI) (BME) 537.20p -1.83%
Taylor Wimpey (TW.) 186.65p -1.79%
BAE Systems (BA.) 506.20p -1.71%
Persimmon (PSN) 3,156.00p -1.68%