FTSE 100 movers: BP and Shell fall, Kingfisher rallies
London's blue chip stocks were in the red on Friday, with resources companies and financials leading the falls, with some selling put down to traders closing out positions ahead of long weekend in the UK and US.
Royal Mail led the fallers however as Berenberg downgraded the stock to 'sell' from 'hold', saying risks to the company's growth and profitability outlook are increasing once again.
"Regulatory change presents another headwind for mail volumes, while intense competition threatens revenue growth in parcels. Combined with various other cost pressures, we see little profit growth over the next three years," analysts said, after the company highlighted the risk from adoption of the GDPR to the rate of letter volume declines.
"We think much of the recent re-rating will likely reverse, if trading disappoints," it added, keeping its 460p price target on the stock unchanged.
BP and Royal Dutch Shell were among the big losers on Friday, while BHP Billiton and Anglo American were prominently in the red.
Metals prices have struggled of late, as the trade talks between China and the US failed to deliver tangible results, and oil prices fell back on Friday on reports that OPEC members and Russia were considering raising output. Brent crude was down almost 3% to $76.63.
Financials were lower, led by Standard Chartered, Lloyds Banking and Aviva, as yields fall. This was also exacerbated as the pound fell to new four-month lows, down 0.5% against the dollar to 1.3316, which further hit Gilt yields.
Smurfit Kappa was up a day after it agreed to acquire Netherlands-based Reparenco for a cash consideration of €460m and news spread that investors were pressuring the board to enter talks with US suitors. On Friday broker Numis was among those reacting positively to the Reparenco deal, which is expected to generate a solid return on capital and "represents a significant step forward" in growth plan, leading to analysts lifting their target price to 3,300p.
B&Q and Screwfix owner Kingfisher rallied as investors bet that disruption at Homebase would provide a boost after Wesfarmers sold the chain for £1 due to its failure to attract UK customers to its Aussie-fied offering.
Analysts at Jefferies said in a note that the sale will have "major consequences" for the British DIY market. "We should now get a sharply improved gross margin outlook. This is materially supportive to B&Q, and Kingfisher," it said.
Market Movers
FTSE 100 (UKX) 7,708.25 -0.11%
FTSE 250 (MCX) 21,091.88 0.49%
techMARK (TASX) 3,554.20 0.68%
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 3,102.00p 3.40%
Whitbread (WTB) 4,251.00p 2.90%
Kingfisher (KGF) 305.10p 2.76%
BT Group (BT.A) 208.68p 2.72%
Informa (INF) 781.40p 2.65%
G4S (GFS) 280.40p 2.52%
Mediclinic International (MDC) 629.60p 2.27%
Paddy Power Betfair (PPB) 9,045.00p 2.15%
NMC Health (NMC) 3,828.00p 1.92%
Severn Trent (SVT) 2,071.00p 1.87%
FTSE 100 - Fallers
Royal Mail (RMG) 527.80p -3.23%
BP (BP.) 553.60p -2.28%
Royal Dutch Shell 'B' (RDSB) 2,625.50p -1.92%
Royal Dutch Shell 'A' (RDSA) 2,550.00p -1.85%
Johnson Matthey (JMAT) 3,415.00p -1.59%
BHP Billiton (BLT) 1,687.60p -1.54%
Anglo American (AAL) 1,776.00p -1.39%
Standard Chartered (STAN) 744.40p -1.30%
Lloyds Banking Group (LLOY) 65.23p -1.17%
Aviva (AV.) 528.80p -0.97%