FTSE 100 movers: Miners bounce back but Sage slumps on downgrade
London's FTSE 100 was down 0.4% at 7,206.62 in afternoon trade on Tuesday, with miners bucking the trend as they bounced back from the previous day's losses.
Schroders was boosted by an upgrade to 'buy' from 'hold' at Berenberg following news on Monday that it and Lloyds Banking Group are in talks about merging their wealth management businesses.
"A strategic wealth management partnership with Lloyds, along the lines of the deal that has been reported in the press, offers further potential upside," Berenberg said.
"At the very least, it demonstrates a corporate dynamism not previously associated with Schroders that may lead investors to reconsider the upside from deployment of the group’s surplus capital (175p per share)."
Direct Line was lifted by an upgrade to 'buy' from 'hold' at Deutsche Bank, which pointed to an attractive valuation, an expected inflection in motor pricing, medium-term optionality and receding risks.
Miners rallied, with Anglo American, Glencore and Antofagasta all recovering from losses the day before after the People's Bank of China cut the reserve requirement ratio for most banks by 100 basis points.
IG market analyst Joshua Mahony said: "To a large degree the decision to cut the reserve ratio highlights a fear that the trade war could continue for some time yet. However, for the miners, a dramatic increase in the amount of cash available for banks to loan out will drive investment, in turn benefitting companies whose product is demanded in times of growth.
"Over the long term, the mining sector looks a good buy, yet much of the short-term volatility will be dictated by affairs in China and the pathway of US trade negotiations."
Royal Mail was in the green despite downgrades at both RBC Capital Markets and HSBC. RBC cut the stock to 'underperform' from 'sector perform', saying that the company's cost warning leaves a significant catch-up required.
Meanwhile, HSBC downgraded the stock to 'hold' from 'buy' saying the company's warning on productivity shortfalls "shakes the foundations of the investment case".
On the downside, Sage fell after a Barclays downgrade to 'underweight' from 'equalweight' on the back of increasing uncertainty.
FTSE 100 - Risers
Evraz (EVR) 562.60p 2.78%
Schroders (SDR) 3,023.00p 1.55%
Antofagasta (ANTO) 825.00p 1.45%
Anglo American (AAL) 1,668.00p 1.29%
British Land Company (BLND) 588.80p 1.06%
Land Securities Group (LAND) 855.00p 1.02%
Direct Line Insurance Group (DLG) 326.10p 0.96%
Glencore (GLEN) 324.25p 0.79%
Royal Mail (RMG) 340.60p 0.65%
Rio Tinto (RIO) 3,757.50p 0.64%
FTSE 100 - Fallers
Rentokil Initial (RTO) 310.70p -4.55%
Melrose Industries (MRO) 175.05p -3.45%
Intertek Group (ITRK) 4,490.00p -3.27%
Sage Group (SGE) 537.40p -3.14%
DCC (DCC) 6,440.00p -3.09%
Halma (HLMA) 1,326.14p -3.06%
Smurfit Kappa Group (SKG) 2,776.00p -2.94%
Ocado Group (OCDO) 768.44p -2.73%
Just Eat (JE.) 621.00p -2.57%
Scottish Mortgage Inv Trust (SMT) 481.46p -2.56%