FTSE 100 movers: Oil giants gush higher; ABF hit by downgrade

(Sharecast News) - London's FTSE 100 was down 0.3% at 10,570.30 in afternoon trade on Monday. Shell and BP were sharply higher as oil prices rose after Donald Trump threatened to blockade the Strait of Hormuz following failed peace talks with Iran.

British Airways and Iberia owner IAG was the worst performer on the index amid disappointment over the lack of a peace deal and concerns about higher fuel costs.

Associated British Foods also fell after RBC Capital Markets downgraded the shares to 'underperform' from 'sector perform' and slashed the price target to 1,850p from 2,050p.

The bank said that as part of its more cautious view on the European retailing sector, it sees further downside risk to consensus earnings forecasts, mainly due to pressure on ABF's largest business Primark.

"Although we think a demerger should make ABF more investable in the long run, we think ABF's valuation is full given more limited growth prospects over the next few years," it said, hence the downgrade.

RBC said it's concerned that Primark's value for money perception may be compromised by its attempts to elevate its offer.

"Primark lacks a transactional digital offer outside the UK, at a time of accelerated shift online and price competition from Shein," it said. "It also has material exposure to markets e.g. Germany, which have become more promotional due to cost of living pressures on consumers."

FTSE 100 - Risers

Metlen Energy & Metals (MTLN) 32.82p 1.77% Admiral Group (ADM) 3,316.00p 1.75% Shell (SHEL) 3,473.50p 1.56% The Sage Group (SGE) 828.60p 1.47% BAE Systems (BA.) 2,222.00p 1.23% BP (BP.) 581.40p 1.20% 3i Group (III) 2,723.50p 1.19% ICG (ICG) 1,693.00p 1.14% British American Tobacco (BATS) 4,388.00p 0.80% London Stock Exchange Group (LSEG) 9,034.00p 0.69%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 378.30p -2.65% United Utilities Group (UU.) 1,363.00p -2.37% Burberry Group (BRBY) 1,129.60p -2.30% Associated British Foods (ABF) 1,873.00p -2.29% Barratt Redrow (BTRW) 256.70p -2.20% Severn Trent (SVT) 3,184.00p -2.15% Whitbread (WTB) 2,447.00p -2.08% Barclays (BARC) 433.30p -1.97% Convatec Group (CTEC) 229.40p -1.88% Informa (INF) 773.20p -1.88%