FTSE 100 movers: Morrisons rallies on upgrade; AB Foods slips on update
London's FTSE 100 was down 0.1% to 7,271.09 in afternoon trade on Monday as the pound surged after the EU's chief Brexit negotiator, Michel Barnier, said a deal was "realistic" in the next six to eight weeks
Morrisons was the biggest riser as HSBC upped the supermarket retailer to 'buy' from 'hold' ahead of its results on Thursday, saying that capital discipline and strong execution are delivering cash generation second only to Ahold Delhaize.
"Looking further out, we believe Morrisons could be well positioned to benefit from the proposed Sainsbury-Asda merger, picking up stores at a good price, from what we believe will be sizeable remedies," it said.
Banks were on the front foot, with Barclays, RBS and Lloyds Banking Group all firmer, taking their cue from a solid performance from their European counterparts. Banks in Italy were particularly strong as the country's finance minister said yields would drop when the government lays out its budget for 2019.
Equipment rental firm Ashtead advanced ahead of its first-quarter results on Tuesday. UBS said in a preview that it expects continued strong trading in Q1 and little change to guidance at this early point in the year.
"However, we believe that given recent weakness in GBP, marking to market will likely see consensus upgrades. We expect a minor slowdown in Sunbelt US volume growth versus Q4’18 +20%, Q3’18 +20%, and expect yield growth to remain around 0%."
Going the other way, Melrose Industries was on the back foot as Barclays reinstated its 'overweight' rating on the turnaround specialist but highlighted short-term risks around tariffs, a deterioration of the autos cycle and FX sensitivity.
Glencore was in the red after JPMorgan Cazenove downgraded the stock to 'neutral' from 'overweight' and removed it from its Analyst Focus List, saying its investment appeal is unlikely to be reinstated until regulatory risks are resolved.
Associated British Foods fell after it reiterated its outlook for the year as a strong performance from Primark, grocery, agriculture and its ingredients business should more than offset the impact of lower EU sugar prices, but warned it would take a £20m hit from the stronger pound.
GlaxoSmithKline declined as it said the US Food and Drug Administration said it needs more clinical data to support the approval of mepolizumab as an add-on treatment for exacerbations in patients with chronic obstructive pulmonary disease.
GVC Holdings ahead of its half-year results on Thursday.
FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 267.45p 2.12%
Royal Bank of Scotland Group (RBS) 249.60p 1.88%
London Stock Exchange Group (LSE) 4,717.00p 1.57%
Ashtead Group (AHT) 2,292.00p 1.51%
Barclays (BARC) 177.00p 1.43%
AstraZeneca (AZN) 5,727.00p 1.36%
Experian (EXPN) 1,915.50p 1.35%
Just Eat (JE.) 712.80p 1.25%
Centrica (CNA) 149.88p 1.20%
Lloyds Banking Group (LLOY) 59.36p 1.06%
FTSE 100 - Fallers
Melrose Industries (MRO) 220.20p -2.65%
Fresnillo (FRES) 816.20p -2.13%
Glencore (GLEN) 290.90p -1.71%
Next (NXT) 5,396.00p -0.95%
Smurfit Kappa Group (SKG) 3,164.00p -0.82%
Associated British Foods (ABF) 2,252.00p -0.79%
Marks & Spencer Group (MKS) 291.40p -0.68%
GlaxoSmithKline (GSK) 1,514.80p -0.67%
GVC Holdings (GVC) 1,058.00p -0.66%
Burberry Group (BRBY) 2,081.00p -0.53%