FTSE 100 movers: WPP rallies on upgrade; Wood Group and Sainsbury's slump
London's FTSE 100 was up 1.2% to 6,891.07 in afternoon trade as investors awaited the outcome of Theresa May's confidence vote.
WPP was on the front foot as Berenberg upped its stance on the advertising giant to 'hold' from 'sell' following its update on Tuesday. It said new CEO Mark Read's plan is sensible, but seems limited in scale.
"As expected, he plans to simplify structure, reinvest in creative talent and tech. This all sounds positive, but the scale of restructuring, savings and reinvestment look modest, particularly compared with Publicis, which has embarked on a similar journey.
"The limited impact on profitability, and the maintaining of the dividend, plays to the UK investor crowd that focuses on EPS and dividend yield, but we are not convinced that it does enough, given the rapidly evolving landscape with increased competition. All this being said, and despite further downgrades to earnings, the stock looks inexpensive, with a decent yield, and we upgrade to hold with a 900p price target."
Rolls-Royce was also on the rise as it said it was still implementing Brexit contingency plans after the UK government pulled a vote on the withdrawal agreement.
The aerospace company also confirmed its 2018 full year forecasts with both group and core profit and cash flow to be in the upper half of its full year guidance range.
On the downside, Wood Group retreated as it warned of future market volatility as it reported 2018 results would be in line with expectations.
Sainsbury's was also weaker after the Competition and Markets Authority said that it and Asda must stick to the current timetable, after the pair pleaded for more time to argue the case for their proposed £12bn merger.
"We have done everything we can to aid their consideration of this work, whilst still ensuring we are able to meet our legally-binding deadline," the CMA said. "This includes extending certain administration timelines where appropriate."
It added: "If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk. As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers."
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 2,116.00p 6.39%
Berkeley Group Holdings (The) (BKG) 3,475.00p 4.95%
WPP (WPP) 884.00p 4.74%
Rolls-Royce Holdings (RR.) 817.60p 4.71%
Johnson Matthey (JMAT) 2,801.00p 4.05%
GVC Holdings (GVC) 668.50p 4.05%
Melrose Industries (MRO) 159.50p 4.04%
Standard Chartered (STAN) 612.30p 3.87%
Barratt Developments (BDEV) 464.40p 3.85%
Severn Trent (SVT) 1,890.00p 3.85%
FTSE 100 - Fallers
Wood Group (John) (WG.) 590.20p -8.38%
Sainsbury (J) (SBRY) 279.30p -5.77%
Next (NXT) 4,558.00p -1.34%
CRH (CRH) 2,024.00p -0.39%
Anglo American (AAL) 1,655.20p -0.39%
Compass Group (CPG) 1,673.00p -0.24%
Randgold Resources Ltd. (RRS) 6,896.00p -0.14%
Kingfisher (KGF) 232.90p 0.00%
Ocado Group (OCDO) 797.60p 0.20%
Admiral Group (ADM) 2,000.00p 0.23%