FTSE 100 movers: Paper and packaging shares rally; Whitbread hit by downgrade

London's FTSE 100 was up 0.8% at 7,573.06 in afternoon trade on Tuesday as Boris Johnson was set to be crowned Prime Minister after winning the Tory leadership contest.

Paper and packaging groups DS Smith and Smurfit Kappa were both on the rise as peer Mondi said half-year underlying earnings would be higher than the €852m (£765m) reported in 2018 as it forecast a big jump in earnings per share.

On the downside, Premier Inn owner Whitbread was under the cosh as Bernstein downgraded the stock to 'underperform' from 'market perform', pointing to a return to a fundamental-led performance following the recent cash return.

The bank, which retained its 4,200p price target, noted the shares have re-rated up to 13x EBIT from 9x eight months ago thanks to the recently-completed £2bn tender offer.

"For us, this is too high a multiple for an asset heavy UK hotel operator which is losing market share and suffering from ongoing cyclical (Brexit) and structural (saturation of UK market) risks," it said.

Tesco and Sainsbury were also weaker after the latest data from market research group Kantar showed total grocery sales at Britain's big four supermarkets fell in the 12 weeks to 14 July.

Sales declined by 0.5% year-on-year, marking the first overall decline in the supermarket sector since June 2016. Still, the market is expected to return to growth once the comparative highs of last summer pass.

FTSE 100 - Risers

Melrose Industries (MRO) 193.05p 5.15%
Smith (DS) (SMDS) 381.80p 4.03%
Smurfit Kappa Group (SKG) 2,672.00p 3.73%
Johnson Matthey (JMAT) 3,193.00p 3.23%
Carnival (CCL) 3,567.59p 2.99%
NMC Health (NMC) 2,392.00p 2.79%
Barclays (BARC) 160.86p 2.72%
BT Group (BT.A) 191.98p 2.65%
Smiths Group (SMIN) 1,625.50p 2.39%
Standard Life Aberdeen (SLA) 308.60p 2.35%

FTSE 100 - Fallers

Whitbread (WTB) 4,498.00p -3.99%
Auto Trader Group (AUTO) 528.00p -2.94%
Tesco (TSCO) 229.20p -2.55%
Just Eat (JE.) 626.40p -2.25%
Ocado Group (OCDO) 1,194.00p -2.13%
Sainsbury (J) (SBRY) 202.80p -1.98%
Rightmove (RMV) 511.90p -1.67%
JD Sports Fashion (JD.) 610.80p -1.29%
Micro Focus International (MCRO) 1,669.60p -1.16%
Aveva Group (AVV) 3,958.00p -1.15%