FTSE 100 movers: M&S rallies but Rio slips as it confirms talks over Grasberg stake sale

London's FTSE 100 was down 0.8% to 7,813.02 in afternoon trade on Wednesday as traders booked profits following record highs in the previous two sessions.

Marks & Spencer was the standout gainer as its proposed revamp of the business trumped a better-than-expected 5.4% fall in annual profits as margins at the retailer’s food business were squeezed by the rising cost of ingredients.

After including a huge £514m of exceptional costs, mostly related to a £321m provision for the cost of the accelerated store closure programme announced earlier in the week, reported pre-tax profits slumped by 62% to £66m.

Standard Chartered was on the rise following a report that Barclays is considering a merger with it or another international bank as part of contingency planning prompted by the arrival of activist investor Edward Bramson as a shareholder.

According to the Financial Times, a director from Barclays and Standard Chartered have had a private discussion about a merger, which is favoured as an option by Barclays’ chairman John McFarlane and Gerry Grimstone, who chairs the bank’s international business.

Severn Trent was in the black after increasing its dividend 6% after the water and sewage group received more incentive payments than expected and said £100m of efficiency savings would be reinvested back into the business. Turnover of £1.69bn in the year to 31 March was up 3% on the prior year thanks to higher tariffs, including the impact of the annual RPI increase on price.

Security firm G4S gained ground as Credit Suisse reiterated its 'outperform' rating on the stock, with accelerating organic growth and rising EBITA margins among the bank's five "reasons to be positive".

On the downside, Rio Tinto retreated as it confirmed that it is in discussions to sell its entire interest in the Grasberg copper mine in Indonesia to Inalum.

Rio Tinto said that discussions between it, Indonesia’s Inalum and Freeport are ongoing, "including as to price", following reports that it could go for $3.5bn. "No agreement has been reached, and there is no certainty that binding agreements will be signed," it said.

FTSE 100 - Risers

Marks & Spencer Group (MKS) 309.90p 6.20%
Imperial Brands (IMB) 2,829.50p 1.65%
Standard Chartered (STAN) 778.10p 1.46%
SSE (SSE) 1,447.00p 1.37%
British American Tobacco (BATS) 3,806.00p 1.16%
NMC Health (NMC) 3,774.00p 1.02%
G4S (GFS) 275.00p 0.95%
United Utilities Group (UU.) 804.40p 0.90%
Centrica (CNA) 148.70p 0.85%
Severn Trent (SVT) 2,077.00p 0.83%

FTSE 100 - Fallers

Anglo American (AAL) 1,826.00p -5.21%
Royal Dutch Shell 'A' (RDSA) 2,656.00p -3.05%
Royal Dutch Shell 'B' (RDSB) 2,747.50p -2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 685.60p -2.42%
Rio Tinto (RIO) 4,313.50p -2.30%
BP (BP.) 574.90p -2.29%
Antofagasta (ANTO) 1,073.50p -2.23%
Glencore (GLEN) 381.15p -2.22%
easyJet (EZJ) 1,743.00p -2.11%
WPP (WPP) 1,336.00p -1.76%