FTSE 100 movers: 3i and Glaxo rally but Fresnillo loses its shine
London's FTSE 100 was down 0.8% to 7,649.54 in afternoon trade on Wednesday as investors waded through a deluge of earnings.
3i Group was the standout gainer after it said net asset value for the first financial quarter was 760p, up from 724p in the year to March 2018. The private equity and infrastructure investor said it realised £337m in cash, net of a £535m reinvestment in ferry operator Scandlines.
GlaxoSmithKline was a high riser as the pharmaceutical giant outlined a new research and development programme and lifted its full-year earnings per share guidance.
Housebuilders Taylor Wimpey, Barratt Developments and Persimmon were all higher as Berenberg initiated coverage of the first two at 'buy' and the last one at 'hold' in a note on the sector.
The bank said Barratt and Taylor Wimpey were its preferred picks. "
Barratt now trades at a discount of 37% to recent history and 19% to the sector, despite a solid growth outlook and a 9% yield," it said.
"Taylor Wimpey continues to generate sector-leading returns, with an 11% yield, while growth forecasts could be materially upgraded if its medium-term strategy prevails."
On the downside, Fresnillo lost its shine after the precious metals miner downgraded its silver production guidance.
Informa retreated after it increased its target for cost cuts from the acquisition of UBM as the events organiser reported higher first-half profit and revenue growth ahead of expectations. Adjusted pre-tax profit for the six months to the end of June rose 3.3% to £264.7m, mainly because of acquisition costs.
InterContinental Hotels was also in the red as Morgan Stanley said that weaker US revenue per available room, mixed US macro and a robust stock performance all keep it "cautiously neutral" on the 'equalweight' rated stock.
Rio Tinto was on the back foot as RBC Capital Markets downgraded it to 'underperform' from 'sector perform' and cut the price target to 3,400p from 3,900p as it said the stock was unlikely to be able to hang on to its current 64% premium to sector valuations.
"Cost inflation and growing potential for M&A are added challenges which will complicate the investment case for this recent perennial winner," RBC said.
FTSE 100 - Risers
3i Group (III) 943.60p 2.43%
GlaxoSmithKline (GSK) 1,581.60p 1.59%
Land Securities Group (LAND) 928.50p 0.92%
Taylor Wimpey (TW.) 173.75p 0.87%
Smurfit Kappa Group (SKG) 3,068.00p 0.79%
Barratt Developments (BDEV) 526.00p 0.77%
Just Eat (JE.) 869.00p 0.53%
Persimmon (PSN) 2,470.00p 0.53%
British Land Company (BLND) 646.80p 0.53%
Smith (DS) (SMDS) 503.40p 0.48%
FTSE 100 - Fallers
Fresnillo (FRES) 1,023.50p -7.46%
Informa (INF) 816.80p -3.91%
InterContinental Hotels Group (IHG) 4,735.00p -3.51%
Rio Tinto (RIO) 4,150.00p -2.50%
Melrose Industries (MRO) 211.91p -2.43%
BAE Systems (BA.) 654.40p -2.33%
Standard Chartered (STAN) 682.40p -2.25%
WPP (WPP) 1,168.00p -2.10%
BHP Billiton (BLT) 1,667.60p -2.04%
Direct Line Insurance Group (DLG) 332.43p -2.03%