FTSE 100 movers: Pearson rallies ahead of update; RBS hit by downgrade

London’s FTSE 100 was flat at 7,624.50 in afternoon trade on Wednesday.

Education publisher Pearson was a high riser a day ahead of its January trading update.

SSE was also in the green after completing the sale of its energy services business to Ovo Energy for £500m.

On the downside, Royal Bank of Scotland was under the cosh after Barclays downgraded its stance on the shares to ‘underweight’ from ‘equalweight’.

Barclays said net interest margin pressure and risk-weighted assets inflation are set to weigh on UK retail and commercial returns, while the restructuring of the underperforming NatWest Markets and Ulster businesses will require patience. In addition, the surplus capital return will be back-end-loaded, it said.

"RBS has been sustaining high returns in recent years; however, our analysis suggests net interest margin headwinds are under-appreciated (particularly if the Bank of England cuts the base rate on January 30th) and RWA inflation will also likely drag."

Barclays, which kept its 225p price target on the stock, said that at 9.5x 2021 earnings per share estimates, it is no longer cheap versus peers.

FTSE 100 - Risers

Pearson (PSON) 620.80p 2.61%
SSE (SSE) 1,496.50p 2.61%
Centrica (CNA) 91.78p 2.27%
Burberry Group (BRBY) 2,320.00p 2.16%
Ocado Group (OCDO) 1,330.00p 2.07%
Severn Trent (SVT) 2,567.00p 1.82%
Rentokil Initial (RTO) 464.50p 1.71%
Coca-Cola HBC AG (CDI) (CCH) 2,755.00p 1.62%
Carnival (CCL) 3,656.00p 1.61%
Experian (EXPN) 2,639.00p 1.58%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 223.30p -3.21%
Prudential (PRU) 1,416.50p -2.58%
Mondi (MNDI) 1,595.00p -2.15%
Croda International (CRDA) 5,040.00p -2.04%
Evraz (EVR) 387.70p -1.87%
Legal & General Group (LGEN) 297.40p -1.85%
Standard Chartered (STAN) 703.40p -1.84%
Smith (DS) (SMDS) 361.60p -1.63%
CRH (CRH) 2,969.00p -1.62%
Sainsbury (J) (SBRY) 217.20p -1.50%