FTSE 100 movers: Tui cruises higher; Smith & Nephew hit by deal report
London's FTSE 100 was up 0.8% at 7,129.11 in afternoon trade on Monday, underpinned by a weaker pound.
Travel operator Tui was the standout gainer, recovering from heavy losses last week on the back of a profit warning. The stock also got a boost as Bank of America Merrill Lynch reinstated coverage at 'buy' with a 1,185p price target.
On the downside, hip and knee replacement products maker Smith & Nephew lost ground following a report that it is in discussions to buy US medical equipment company NuVasive for more than $3bn.
Late on Friday, the Financial Times said the exact terms of any discussions had not been learned and talks between the two parties may fall apart. Goldman Sachs pointed out that the FT article came just a day after S&N said it plans to more actively pursue M&A and to increase average leverage to 2.0x-2.5x net debt/EBITDA.
RBS was also under pressure after Morgan Stanley took a look at the UK mortgage market and cut the bank's rating to 'equalweight' from 'overweight' and the price target to 300p from 315p. At the same time, it upped its recommendation on Lloyds to 'overweight' from 'equalweight'.
"Mortgage front book pricing, slower growth and a flattening curve paint a difficult picture for UK NII in 2019," MS said. "On 7-9x price-to-earnings we see this as priced in and upgrade Lloyds, which we think will prove most resilient, to overweight. We see most earnings risk at RBS and downgrade to equalweight."
FTSE 100 - Risers
TUI AG Reg Shs (DI) (TUI) 954.40p 4.49%
Smurfit Kappa Group (SKG) 2,240.00p 4.28%
Ocado Group (OCDO) 935.40p 3.43%
WPP (WPP) 825.00p 2.77%
Hargreaves Lansdown (HL.) 1,674.50p 2.51%
British American Tobacco (BATS) 2,756.00p 2.49%
Schroders (SDR) 2,655.00p 2.47%
Mondi (MNDI) 1,847.00p 2.41%
Scottish Mortgage Inv Trust (SMT) 493.87p 2.30%
Evraz (EVR) 528.40p 2.09%
FTSE 100 - Fallers
Antofagasta (ANTO) 840.60p -3.53%
Smith & Nephew (SN.) 1,467.00p -3.17%
Anglo American (AAL) 1,907.00p -1.44%
GlaxoSmithKline (GSK) 1,543.60p -1.35%
Direct Line Insurance Group (DLG) 338.80p -1.31%
Glencore (GLEN) 289.10p -1.01%
Royal Bank of Scotland Group (RBS) 236.80p -0.96%
AstraZeneca (AZN) 5,661.00p -0.61%
Admiral Group (ADM) 2,130.00p -0.47%
Paddy Power Betfair (PPB) 6,355.00p -0.31%