FTSE 100 movers: WPP hit by Barclays downgrade; Babcock surges

(Sharecast News) - London's FTSE 100 was down 0.5% at 8,717.99 in afternoon trade on Wednesday. Advertising firm WPP was the biggest loser on the index after Barclays downgraded the shares to 'underweight' from 'equalweight' and cut the price target to 550p from 700p.

Educational publisher Pearson also fell after JPMorgan Cazenove cut its price target on the stock to 1,310p from 1,330p.

The bank, which rates the shares at 'overweight', said first-half growth was set to be subdued as expected, with an acceleration in the second half.

On the upside, defence engineering company Babcock surged to the top of the index after saying it expects to hit its underlying operating margin of 8% a year early and increasing its medium-term target in a 'new era' of weapons spending amid global political instability.

Babcock also posted a sharp jump in annual operating profit to £364m from £241.6m a year earlier and announced a £200m share buyback.

Russ Mould, investment director at AJ Bell, said: "Shares in defence and engineering contractor Babcock have more than doubled year to date so a positive set of results was needed for investors to sustain their enthusiasm.

"Largely that's what they got - the numbers themselves were strong but so too was the accompanying rhetoric as the company talked about a 'new era for defence'. A meaningful increase in medium-term guidance won't have hurt either."

He added: "Some eyebrows may be raised at the decision to launch the company's debut share buyback when its share price is at its highest level in more than a decade and not a million miles off its all-time high from 2014. Although, in fairness, this is merely following the recent trend for UK companies to return an increasing proportion of the capital they dole out to shareholders this way."

Rolls-Royce and BAE Systems also gained.

FTSE 100 - Risers

Babcock International Group (BAB) 1,159.00p 12.20% Experian (EXPN) 3,890.00p 1.91% Rolls-Royce Holdings (RR.) 925.40p 1.78% International Consolidated Airlines Group SA (CDI) (IAG) 332.70p 1.59% Fresnillo (FRES) 1,432.00p 1.56% Ashtead Group (AHT) 4,480.00p 1.38% Entain (ENT) 860.80p 1.37% JD Sports Fashion (JD.) 77.70p 1.33% Halma (HLMA) 3,204.00p 1.33% BAE Systems (BA.) 1,823.50p 1.25%

FTSE 100 - Fallers

WPP (WPP) 509.00p -2.49% easyJet (EZJ) 527.40p -2.15% 3i Group (III) 3,967.00p -1.56% SEGRO (SGRO) 687.20p -1.46% Pearson (PSON) 1,043.50p -1.42% Mondi (MNDI) 1,169.00p -1.39% Unite Group (UTG) 841.50p -1.35% NATWEST GROUP (NWG) 503.00p -1.33% Berkeley Group Holdings (The) (BKG) 3,850.00p -1.33% Schroders (SDR) 362.20p -1.31%