FTSE 100 movers: Wood Group boosted by upgrade; Melrose moves lower
London's FTSE 100 was up 1.2% to 7,035.16 in afternoon trade on Monday.
Wood Group was the standout gainer as HSBC upped the stock 'buy' from 'hold' and lifted the price target to 780p from 725p arguing that recent downside represents an entry point to a quality name with diversified exposure.
The bank said the slide in the share price - down nearly 20% since the beginning in October in line with a wider oilfield services selloff linked to a drop in Brent crude - is overdone and now represents a good buying opportunity.
"WG’s share price performance is flat year-to-date despite significant progress having been made, in our view, to address key investor concerns around the Amec Foster-Wheeler integration, net debt and future growth prospects," it said.
Vodafone was also in the green as Reuters said the EU was set to approve Deutsche Telekom's acquisition of Tele2's Dutch unit without conditions.
Precious metals miner Fresnillo shone following heavy losses last week on the back of worries about the impact of new mining laws in Mexico.
On the downside, Melrose Industries retreated after Sky News said the company was weighing up whether to press on with an immediate auction of GKN Powder Metallurgy following initial bids last week that valued the business at about £1.6bn - well below analysts' forecasts.
Sky cited a source as saying: "They will sell the business but it may not be through this particular auction."
RBC Capital Markets said: "Melrose management are strict on asset valuation and are unlikely to sell if current slightly more uncertain market conditions have weighed on bids for Powder Met. However, at this point, this is not a management-confirmed story, and we believe that if bids of £1.8bn+ were to be received that would be acceptable (versus £2bn in analyst forecasts referenced by the Sky News article). Our sum-of-the-parts assumes a £1.8bn valuation.
Ocado was in the red as Berenberg hiked its price target to 876p from 286p as it updates its estimates and valuation for the company's licensing deals but said there is a risk of further downgrades and limited catalysts that would drive outperformance over the near term, particularly in a market environment where growth stocks are underperforming.
FTSE 100 - Risers
Wood Group (John) (WG.) 626.60p 6.64%
Vodafone Group (VOD) 163.64p 5.49%
Fresnillo (FRES) 776.60p 4.05%
Prudential (PRU) 1,575.50p 3.75%
Rolls-Royce Holdings (RR.) 840.00p 3.40%
Kingfisher (KGF) 248.60p 3.15%
Standard Life Aberdeen (SLA) 272.92p 3.15%
3i Group (III) 867.00p 3.07%
HSBC Holdings (HSBA) 673.70p 3.01%
WPP (WPP) 878.00p 2.98%
FTSE 100 - Fallers
Melrose Industries (MRO) 175.10p -3.71%
Just Eat (JE.) 581.20p -3.49%
Paddy Power Betfair (PPB) 7,030.00p -2.23%
Royal Mail (RMG) 332.90p -2.09%
Imperial Brands (IMB) 2,431.00p -1.44%
Burberry Group (BRBY) 1,829.00p -1.14%
Next (NXT) 5,140.00p -1.00%
Ocado Group (OCDO) 786.60p -0.98%
Unilever (ULVR) 4,204.00p -0.98%
Taylor Wimpey (TW.) 151.45p -0.75%