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FTSE 100 movers: Rolls-Royce rallies but Pearson hit by downgrade
London's FTSE 100 was up 0.9% to 7,770.48 in afternoon trade on Thursday as investors mulled over better-than-expected UK retail sales figures and news that the ECB will end it quantitative easing programme at the end of the year.
Rolls-Royce was the standout gainer after it announced job cuts, as expected. The company said it will axe 4,600 jobs, mainly in the UK, to save £400m a year in the latest round of restructuring under chief executive Warren East.
The aero-engine maker will cut support staff and management over the next two years with a third of the jobs disappearing by the end of 2018. The cost of the restructuring will be £500m.
CMC Markets analyst David Madden said: "The company will host an investor day tomorrow, and traders will be listening out for how the company plans to generate profit after 2020. The firm derives a large amount of its revenue from after-sales services, and this will be in focus."
GlaxoSmithKline was a high riser after it said that its two-drug treatment for HIV met its main goal in late-stage studies. Also helping to boost the stock was news that Mylan has said the US Food and Drug Administration will reject its generic version of Glaxo's blockbuster asthma drug Advair after finding "minor deficiencies".
Miners were under the cosh following the release of disappointing Chinese retail sales and investment data, with Antofagasta and Anglo American both lower.
Persimmon, Severn Trent and WPP all retreated as their stock went ex-dividend.
Relx, formerly Reed Elsevier, was in the red as UBS cut the stock to 'sell' from 'neutral' on valuation grounds, saying that the risk/reward was skewed to the downside.
Pearson was weaker after a downgrade from Barclays to 'underweight' from 'equalweight'.
"It used to be easy to make Pearson's shares look good value in outer years if a few elements showed better progress. Now we find that, even in an upside scenario, it is hard to generate much upside to the current price. We think this is the time to turn negative," it said.
Anglo American was also reacting to news that it has agreed to sell a stake in its Quellaveco copper project in Peru to Mitsubishi Corporation for $600m.
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 870.80p 5.09%
BT Group (BT.A) 214.50p 3.12%
Centrica (CNA) 152.80p 2.69%
GlaxoSmithKline (GSK) 1,580.40p 2.28%
Smurfit Kappa Group (SKG) 3,022.00p 2.23%
Kingfisher (KGF) 314.70p 1.71%
Royal Mail (RMG) 499.90p 1.56%
NMC Health (NMC) 3,686.00p 1.49%
Halma (HLMA) 1,454.90p 1.39%
Carnival (CCL) 4,770.00p 1.34%
FTSE 100 - Fallers
Persimmon (PSN) 2,711.00p -3.39%
Unilever (ULVR) 4,030.00p -2.89%
Severn Trent (SVT) 1,876.00p -2.85%
Relx plc (REL) 1,614.50p -2.45%
Anglo American (AAL) 1,773.20p -1.38%
Mondi (MNDI) 2,077.00p -1.33%
Antofagasta (ANTO) 1,067.50p -1.29%
Pearson (PSON) 885.60p -1.18%
WPP (WPP) 1,222.00p -1.05%
Johnson Matthey (JMAT) 3,783.00p -1.02%