FTSE 100 movers: Centrica powers up leaderboard

Commodities stocks were dominating the FTSE 100 leaderboard led by Centrica, while defensive stocks led the fallers.

JPMorgan Cazenove upgraded the British Gas owner to 'overweight' from 'neutral' due to rising commodity price that are forecast to lift Centrica’s earnings by 25% from 2020. Updating Centrica’s wholesale costs to recent market prices led analysts to bump up their target price to 180p from 150p.

“Our refreshed base-case estimates point to a more stable set of credit metrics and free cash flow profile. As a result, we have removed a dividend cut from our estimates,” Cazenove added.

Dollar weakness was also helping oil and metals prices, said Accendo Markets analyst Mike van Dulken. "Oil prices are recovering from recent lows to continue a two-day rally (to the benefit of energy shares around the world) on the back of a surprise API oil drawdown (even if gasoline stocks rose; US consumer confidence barometer, driving less?) and in spite of talks about oil-producing nations mulling adding back supply."

Airline easyJet was outdone by larger rival IAG after the orange-liveried budget carrier reported increased passengers and capacity utilisation in May, a month when 2.5% of planned capacity was affected by French and Italian industrial action and bad weather.

Smurfit Kappa shares were higher as it talked up its prospected after US-based International Paper walked away from takeover talks overnight, bemoaning the Dublin-based cardboard packing group's lack of communication after it rebuffed approaches in February and March.

Shell was lower as Société Générale downgraded the oil colossus to 'hold' from 'buy' as its share price already is taking account of the 2018-20 buyback of $25bn promised back in 2015. “We believe the market fully expects and therefore prices in that buyback. Its eventual start would provide short-term relief but no real surprise. But in the opposite direction, precisely because the buyback is baked into market expectations, further delays would disappoint.”

Defensive stocks were leading the fallers, with Imperial Brands and British American Tobacco paving the way. This comes as BoA Merrill Lynch's 'flow show' note pointed to increased inflows to defensive sectors this week, into sectors including health and consumer, REITs, tech.

Market Movers

FTSE 100 (UKX) 7,706.74 0.26%
FTSE 250 (MCX) 21,161.40 0.52%
techMARK (TASX) 3,544.76 0.16%

FTSE 100 - Risers

Centrica (CNA) 146.25p 2.27%
Rio Tinto (RIO) 4,439.00p 2.08%
International Consolidated Airlines Group SA (CDI) (IAG) 693.80p 2.06%
Barratt Developments (BDEV) 562.64p 2.04%
Anglo American (AAL) 1,895.80p 1.99%
Antofagasta (ANTO) 1,133.50p 1.75%
Berkeley Group Holdings (The) (BKG) 4,296.00p 1.68%
ITV (ITV) 170.40p 1.64%
Marks & Spencer Group (MKS) 292.80p 1.56%
Just Eat (JE.) 864.20p 1.53%

FTSE 100 - Fallers

Imperial Brands (IMB) 2,641.50p -1.57%
Royal Mail (RMG) 485.80p -1.28%
British American Tobacco (BATS) 3,704.50p -0.95%
United Utilities Group (UU.) 779.60p -0.86%
Old Mutual (OML) 230.90p -0.86%
British Land Company (BLND) 685.60p -0.81%
Unilever (ULVR) 4,136.50p -0.71%
Aviva (AV.) 508.80p -0.59%
BT Group (BT.A) 204.85p -0.53%
Shire Plc (SHP) 3,951.00p -0.45%