FTSE 100 movers: DS Smith rallies on disposal; Burberry hit by downgrade
London’s FTSE 100 was up 0.1% to 7,189.69 in afternoon trade on Wednesday.
DS Smith was the top gainer as it said trading since 1 November has continued to be strong and in line with its expectations, and announced the sale of its plastics division to Olympus Partners for an enterprise value of $585m (around £450m).
The packaging company said the sale - which is due to complete in the second half of the year - represents an important step in its continued progress as a leader in sustainable packaging and accelerates the programme of deleveraging, alongside organic cashflow.
British American Tobacco and Imperial Brands were on the rise as investors cheered news that US FDA Commissioner Scott Gotlieb - who was spearheading a ban on menthol cigarettes - has resigned.
Having been in the red earlier, EasyJet was lifted as analysts at Kepler said they "believe Lufthansa is very interested in easyJet" after a disappointing performance in recent years for the German carrier.
"After the acquisition of Air Berlin’s assets at Berlin Tegel Airport, easyJet is now the main carrier in Berlin, where we expect both easyJet and Eurowings to generate losses this year. While easyJet’s service massively overlaps with IAG and AF-KLM, we believe Lufthansa’s and easyJet’s joint businesses would imply manageable hurdles with the EU competition authorities."
On the downside, Legal & General was in the red even as it lifted its total dividend 7% to 16.42p after reporting 10% growth in operating profit to £1.9bn for 2018.
David Cheetham, chief market analyst at XTB, said: "A worse-than-expected solvency ratio and a below forecast level of cash generation are not to be taken lightly, but the long term prospects seem to remain favourable for the firm going forward, with the selling seen likely just a case of investors taking some profits off the table after an impressive run higher of late."
Luxury fashion brand Burberry was under the cosh as Goldman Sachs cut its stance on the stock to ‘sell’ from ‘neutral’ and reduced the price target to 1,855p from 2,148p, pointing to a demanding valuation.
Product testing and certification company Intertek saw its shares knocked lower by a downgrade to ‘underweight’ at Barclays, while Prudential was weaker as Barclays cut its price target on the stock to 2,063p from 2,104p.
FTSE 100 - Risers
Smith (DS) (SMDS) 366.40p 4.96%
Wood Group (John) (WG.) 573.80p 4.48%
GVC Holdings (GVC) 726.50p 4.23%
British American Tobacco (BATS) 3,014.50p 3.93%
NMC Health (NMC) 2,986.00p 1.63%
BHP Group (BHP) 1,785.20p 1.58%
Vodafone Group (VOD) 135.78p 1.34%
Glencore (GLEN) 310.05p 1.34%
Imperial Brands (IMB) 2,611.00p 1.34%
Easyjet (EZJ) 1,224.00p 1.43%
FTSE 100 - Fallers
Legal & General Group (LGEN) 275.40p -3.77%
Burberry Group (BRBY) 1,892.50p -3.12%
Intertek Group (ITRK) 4,907.00p -1.78%
Fresnillo (FRES) 803.80p -1.57%
Hargreaves Lansdown (HL.) 1,756.00p -1.49%
Rolls-Royce Holdings (RR.) 900.20p -1.40%
Carnival (CCL) 4,197.00p -1.15%
Taylor Wimpey (TW.) 182.85p -0.89%
Prudential (PRU) 1,611.60p -0.89%
Aviva (AV.) 435.10p -0.84%