FTSE 100 movers: Burberry and Ashtead lead blue chip tumble

The FTSE 100 was in the red on Tuesday, with miners and Burberry leading the fallers.

Just Eat was up as rival Deliveroo was singled out as the latest company to face a parliamentary probe into its working practices. Labour MP Frank Field, who has led investigations into pay and working conditions at the likes of Uber and Parcelforce, said Deliveroo was “the next one on the list”. He plans to gather evidence from Deliveroo riders over the next five weeks.

Plumbing and heating products distributor Ferguson was second on the leaderboard after posting a 17.1% jump in third-quarter trading profit thanks to strong US residential markets. The company, which changed its name from Wolseley last year, said the fourth quarter has "started well" with organic revenue growth in line with the third quarter. Analysts at RBC Capital Markets said: "We continue to believe that Ferguson's end markets remain robust, and we like the strength of its market position and believe that the scale advantages (around procurement and supply chain and the customer proposition) should allow the business to continue to take further market share."

Cigarette makers British American Tobacco and Imperial Brands were on the rise as the fall in the pound will boost their heavy earnings exposure to the dollar.

Shares in Royal Bank of Scotland were boosted by a note from Morgan Stanley, which increased its earnings per share forecastby 8% in 2020 and upped its price target to 335p. With the US Department for Justice fine out of the way, analysts see "more room for RBS to improve its capital structure reducing funding costs and increasing shareholder returns via share buybacks/special dividend". They estimate at least a 20% total shareholder return 2018-20E based on 100% payout.

Similarly, Jefferies analysts moved the envelope on Royal Mail's share price target to 400p, though that's still more than pound below the current market price. But it was hardly a positive write-up, pointing to earnings momentum, profitability and productivity that "remain among the lowest in the European postal sector, as productivity improvements will have to be shared with employees through a shorter working week", with parcel exposure focused on the most mature markets and insufficient to offset increasing pressure on letter volume.

One of the biggest fallers was DS Smith as it launched a £1bn rights issue to fund the €1.7bn acquisition of smaller Spanish packaging rival Europac. DS Smith, which announced the proposed acquisition at the start of the month, on Tuesday revealed plans for a 3-for-11 rights issue at a price of 350p per new share, with new ordinary shares representing just over 27.3% of the current issued share capital to be issued.

Miners were prominent among the fallers as the pound was down 0.6% at $1.3162 and trading to 1.317 for the first time in seven months amid worries about Brexit and strength of the dollar as Washington and Beijing squared off over trade.

The trade tensions were being ramped up as US President Donald Trump called for tariffs on a new $200bn-worth of Chinese imports as well as a back-up list of a further $200bn-worth of goods that could be targeted if Beijing responded with countermeasures of its own. "Tit-for-tariff," said Mike van Dulken, head of research at Accendo Markets. "The question now, is where this all ends. USD strength from safe-haven seeking is pushing GBP lower, however, the FTSE is failing to benefit as much as it usually would; the threat to international trade is understandably greater than the accounting benefit."

Analysts at IG pointed to a 3% fall for Burberry, "as investors weigh up the hit to Chinese spending".

Ashtead lost ground as its fourth-quarter pre-tax profits coming in 1% below expectations, with yield flat year-on-year. Jefferies analysts were positive though, saying they believed that the firm's yield was flat simply a factor of the company's maturity and point in the cycle. The decline in the drop-through seen in Ashtead's rental revenue growth in the fourth quarter, that had been the result of a number of items, including some one-offs, while the fall in its Canadian margins at the EBITDA level was solely the result of one-off costs linked with the integration of its newly acquired CRS business in Canada.

Market Movers

FTSE 100 (UKX) 7,611.77 -0.26%
FTSE 250 (MCX) 20,850.54 -0.71%
techMARK (TASX) 3,540.34 -0.31%

FTSE 100 - Risers

Just Eat (JE.) 805.00p 2.29%
Ferguson (FERG) 6,011.00p 2.05%
British American Tobacco (BATS) 3,694.50p 1.64%
Imperial Brands (IMB) 2,636.00p 1.56%
Royal Bank of Scotland Group (RBS) 258.10p 1.41%
Royal Mail (RMG) 511.00p 1.27%
Reckitt Benckiser Group (RB.) 6,182.00p 1.24%
Centrica (CNA) 153.95p 1.12%
Admiral Group (ADM) 1,899.00p 0.90%
Direct Line Insurance Group (DLG) 351.60p 0.83%

FTSE 100 - Fallers

Evraz (EVR) 513.20p -4.65%
Smith (DS) (SMDS) 526.20p -4.26%
Burberry Group (BRBY) 2,088.00p -3.56%
Ashtead Group (AHT) 2,290.00p -3.46%
Rio Tinto (RIO) 4,122.50p -3.18%
Persimmon (PSN) 2,627.00p -2.74%
Anglo American (AAL) 1,689.00p -2.54%
Intertek Group (ITRK) 5,652.00p -2.28%
BHP Billiton (BLT) 1,642.20p -2.19%
Glencore (GLEN) 372.25p -2.18%