FTSE 100 movers: Next rallies but airlines under the cosh
London’s FTSE 100 was up 0.6% to 7,499.88 in afternoon trade on Tuesday, helped along by retail and oil stocks.
Next was the standout gainer as it raised its guidance for annual profit after trading in August and early September was better than expected. Group pre-tax profit will be £727m in 2018, broadly in line with the year before, Next predicted. In May it estimated profit would fall to £717m.
"A relatively low valuation of 12 times forward earnings and strong operating margins, plus the usual positives from the online division, continue to make Next an investor favourite, now that memories of its steep dive from £75 to £35 have receded," said Chris Beauchamp, chief market analyst at IG.
Randgold Resources was on the rise a day after announcing that it had agreed to be bought by Barrick Gold to create the world’s largest gold miner.
Just Eat was on the front foot despite reports that Amazon is in talks to buy Deliveroo. Last week, shares in the company took a hit from reports that Uber was looking to buy Deliveroo.
Oil giants BP and Shell were higher as Brent continued on its upward trajectory, hitting a fresh four-year high above $82 a barrel.
Glencore was up after Morgan Stanley upgraded the miner to ‘overweight’ from ‘equalweight’ and after the company said it will buy back another $1bn of shares as it approaches the end of its previous $1bn share buyback.
In a note on the metals and mining sector, MS said mining valuations are approaching historical lows and the sector has reached very oversold levels despite earnings per share revisions already troughing.
The bank said: "Our sector team has just raised their view on the metals & mining sector to ‘attractive’ from ‘in line’. They believe that appealing valuation and bottoming spot earnings provide an opportunity to get exposure to a structurally improved industry that prioritises balanced capital allocation, dividend and cost efficiency with low financial risk."
Glencore is among its preferred names in the sector.
On the downside, EasyJet and British Airways parent IAG were both under the cosh on the back of rising oil prices.
FTSE 100 - Risers
Next (NXT) 5,612.00p 9.52%
Randgold Resources Ltd. (RRS) 5,452.00p 4.44%
Just Eat (JE.) 684.00p 4.11%
Intertek Group (ITRK) 4,956.00p 3.34%
Glencore (GLEN) 340.70p 3.24%
Evraz (EVR) 563.00p 2.48%
Compass Group (CPG) 1,672.00p 2.36%
BP (BP.) 582.90p 2.25%
Taylor Wimpey (TW.) 172.75p 2.19%
Royal Dutch Shell 'A' (RDSA) 2,645.00p 1.95%
FTSE 100 - Fallers
easyJet (EZJ) 1,330.00p -3.69%
International Consolidated Airlines Group SA (CDI) (IAG) 664.20p -3.26%
Pearson (PSON) 875.60p -1.40%
London Stock Exchange Group (LSE) 4,612.00p -1.09%
Royal Bank of Scotland Group (RBS) 256.40p -0.93%
Vodafone Group (VOD) 168.60p -0.83%
DCC (DCC) 7,330.00p -0.81%
Rolls-Royce Holdings (RR.) 990.40p -0.70%
Burberry Group (BRBY) 1,997.00p -0.70%
Lloyds Banking Group (LLOY) 61.24p -0.68%