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FTSE 100 movers: Broker upgrades provide light amid retailer's gloom
FTSE 100 shares looked to break a four-day losing streak on Friday, boosted by a weaker pound and with broker upgrades providing some optimism among the gloomy retail updates.
EasyJet led the blue chip index as analysts at Morgan Stanley upgraded the stock, saying the budget carrier looked ready to reap the benefits of its moves to expand its short-haul flight business, as its acquisition of recently collapsed carrier Air Berlin's operations at Tegel Airport set up the British firm to take the title of Germany's leading airline. The rating was lifted to 'overweight' from 'equal-weight' and the target price hiked to 1,725p from 1,490p.
Other airlines were also on the up, even though Morgan Stanley analysts told clients that momentum was switching from legacy brands to low-cost carriers, with British Airways and Iberia owner International Airlines Group kept at 'equal weight' and Ryanair at 'overweight'.
Elsewhere in the sector, Holiday Inn owner InterContinental Hotels booked some gains after it was lifted by an upgrade to 'buy' from 'neutral' at Goldman Sachs. "We expect momentum to pick up again for IHG," analysts said as they raised their price target to 5600p, viewing the market as currently underestimating IHG's "ability to benefit from a supportive cycle through operating leverage".
Unilever was higher on the back of newspaper speculation that it might be mulling a move to boost its growth with a takeover of premium drinks mixer maker Fevertree. Unilever will try to do a deal for "at least £28 per share", the Daily Telegraph reported, with rumours rising after the drinks company appointed Kevin Havelock, Unilever's global president of refreshment, as a non-executive director last week.
Paper and packaging names were mostly higher, in a trend seen in the US stocks too, though while Smurfit Kappa and Mondi were higher, DS Smith was slightly in the red.
Fallers were led by the retail sector, after official UK data disappointed. The Office for National Statistics revealed retail sales volumes in December fell 1.6% compared to the preceding month, worse than the 1.1% dip the market expected.
With sentiment further dented by the morning's profit warnings from small cap retailers Carpetright and Bonmarche, blue chip shopkeepers such as B&Q owner Kingfisher, Next, Marks & Spencer and Tesco were sent lower. Morrisons and Sainsbury's erased earlier losses to climb higher by the close, however.
BT Group slipped after a High Court ruling prevented it from changing the rate of inflation used to calculate the pension deficit for many of its workers.
BP was down as the Brent Crude index fell 1.5%.
Market Movers
FTSE 100 (UKX) 7,727.53 0.35%
FTSE 250 (MCX) 20,657.97 -0.03%
techMARK (TASX) 3,519.00 0.44%
FTSE 100 - Risers
easyJet (EZJ) 1,581.00p 4.49%
Smurfit Kappa Group (SKG) 2,636.00p 2.73%
InterContinental Hotels Group (IHG) 4,932.00p 2.66%
Rentokil Initial (RTO) 315.70p 2.23%
NMC Health (NMC) 3,266.00p 2.13%
Fresnillo (FRES) 1,404.00p 2.11%
Unilever (ULVR) 4,097.00p 1.92%
St James's Place (STJ) 1,278.00p 1.71%
Mondi (MNDI) 1,972.00p 1.70%
International Consolidated Airlines Group SA (CDI) (IAG) 658.40p 1.64%
FTSE 100 - Fallers
Kingfisher (KGF) 335.60p -2.44%
Next (NXT) 4,886.00p -1.89%
BT Group (BT.A) 263.10p -1.46%
BP (BP.) 510.00p -1.26%
Centrica (CNA) 139.35p -1.17%
Tesco (TSCO) 208.20p -0.72%
Morrison (Wm) Supermarkets (MRW) 227.40p -0.61%
DCC (DCC) 7,590.00p -0.59%
United Utilities Group (UU.) 768.20p -0.39%
3i Group (III) 937.80p -0.38%