FTSE 100 movers: Rolls-Royce roars higher; miners take a hit
London’s FTSE 100 was down 1.4% to 7,660.16 in afternoon trade on Friday, with jitters setting in as relations between the US and China escalated again.
Rolls-Royce was the standout gainer after saying it should exceed its target of £1bn of free cash flow by 2020 following its announcement a day earlier that it was cutting 4,600 jobs.
The aerospace and defence giant also stuck by its FY18 guidance for free cash flow despite an additional £100m in costs from issues related to its Trent 1000 engines and said it expects the restructuring announced on Thursday to deliver net cost savings of £400m a year by the end of 2020.
Mike van Dulken, head of research at Accendo Markets, said this was "all good noise to help the shares reverse strongly from lows of 820p and break above May highs".
Tesco was also a high riser after saying that UK and Irish sales slowed slightly in the first quarter of its new financial year but with wholesale acquisition Booker bedding down, group-wide growth accelerated slightly ahead of expectations.
For the 13 weeks ended 26 May, UK like-for-like sales grew 2.1% and Ireland 3%, down slightly from 2.3% and 5.3% in the fourth quarter of last year, while Booker added 14.3% growth.
Central European operations were said to have delivered a strong underlying performance but LFLs sales fell 1% due to new Sunday trading laws in Poland and Slovakia. LFL sales in Asia fell 9%, which was an improvement from the 14% quarterly decline preceding it.
Overall, group LFL growth came out at 1.8%, higher than any of period in the past year and Tesco's tenth straight quarter of LFL sales growth.
Miners were under the cosh as escalating tensions between the US and China reignited worries about a trade war after China vowed to retaliate quickly to US President Trump’s approval of 25% tariffs on $50bn worth of Chinese imports.
Glencore was in the red after saying that along with Katanga Mining, it has determined that its "only viable option" to avoid the material risk of seizure of its assets under Democratic Republic of the Congo court orders would be for its subsidiaries Mutanda and KCC to pay relevant royalties as and when they become due to Ventora in non-US dollars, without involving US persons, in order to discharge their obligations under the terms of the pre-existing contracts.
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 970.40p 9.92%
Tesco (TSCO) 256.30p 2.60%
Coca-Cola HBC AG (CDI) (CCH) 2,678.00p 1.83%
Unilever (ULVR) 4,093.50p 1.49%
Smurfit Kappa Group (SKG) 3,092.00p 1.31%
Imperial Brands (IMB) 2,637.00p 1.11%
Relx plc (REL) 1,625.00p 0.96%
Diageo (DGE) 2,798.00p 0.88%
Ashtead Group (AHT) 2,399.22p 0.64%
Smith & Nephew (SN.) 1,368.00p 0.40%
FTSE 100 - Fallers
Mediclinic International (MDC) 539.80p -4.32%
Old Mutual (OML) 219.20p -3.39%
Royal Bank of Scotland Group (RBS) 255.20p -3.19%
Anglo American (AAL) 1,737.40p -3.12%
BHP Billiton (BLT) 1,695.40p -3.05%
DCC (DCC) 7,030.00p -3.03%
Glencore (GLEN) 386.50p -3.01%
Barclays (BARC) 194.66p -2.96%
Rio Tinto (RIO) 4,273.50p -2.92%
Hargreaves Lansdown (HL.) 2,030.00p -2.78%