FTSE 100 winners and losers: Rolls-Royce, housebuilders, Diageo

Smoke rises after an Iranian attack on a fuel depot at Kuwait International Airport today. Photo: Stringer/Anadolu via Getty Images.

Many of the stocks hit hardest by the Middle East war saw only limited upside today as Barclays (LSE:BARC) and GSK (LSE:GSK) instead helped the FTSE 100 index back to positive territory for the year to date.

The blue-chip index tracked the 1.5% gains of continental markets after diplomatic efforts to end the conflict helped cut the price of Brent crude oil to a still lofty level of $99.52 a barrel.

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The FTSE 100’s advance to 10,118 was not accompanied by a rush towards the likes of Unilever (LSE:ULVR) and Marks & Spencer Group (LSE:MKS), which are among the fifth of stocks in the index to have fallen by 15% or more.

There was a little more appetite for the 5.8%-yielding shares of Persimmon (LSE:PSN) and Barratt Redrow (LSE:BTRW), having fallen by more than 25% on the back of mortgage affordability and cost pressures.

Their respective gains of 21p to 1,125.5p and 10.3p to 273.3p followed an easing of the UK’s 10-year gilt yield, which on Monday reached its highest level since the financial crisis.

Other rate-sensitive stocks on today’s FTSE 100 risers board included Land Securities Group (LSE:LAND) and Segro (LSE:SGRO), although the property firms are still at least 15% cheaper than at the end of February.

Biggest FTSE 100 risers since Iran war began

Source: ShareScope. Past performance is not a guide to future performance.

Hopes that the UK economy can avoid a stagflationary shock lifted the mood around NatWest Group (LSE:NWG), which has underperformed Lloyds Banking Group (LSE:LLOY) since the start of the war. It is down by about 13% for a forecast dividend yield of 6.6%, compared with the 8% fall by its fellow UK-focused lender.

Barclays made strong progress today but is still 13% lower after the war fuelled uncertainty over a three-year plan to return at least £15 billion via dividends and share buybacks.

HSBC Holdings (LSE:HSBA) is off by 14% despite today’s improvement, in line with the decline for British Airways owner International Consolidated Airlines Group SA (LSE:IAG) after demand and jet-fuel cost assumptions were hit by Middle East disruption.

The defensive qualities of the pharmaceutical sector have failed to protect investors during the current crisis as AstraZeneca (LSE:AZN) is off 10% and GSK (LSE:GSK) 8% lower, although the pair experienced stronger trading today.

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Rolls-Royce Holdings (LSE:RR.) is more than 10% below its record high of early March as investors have revised their expectations for engine flying hours, after-market demand and supply chain costs.

Bank of America today trimmed its free cash flow estimates by 7% for this year and 4% in 2027, but the City firm still sees significant upside for shares after cutting its price target to 1,740p from 1,770p. The shares were today 25p higher at 1,190.5p.

Diageo (LSE:DGE) shares continue to trade at a multi-year low near 1,400p, even though the Guinness and Smirnoff owner today announced progress with the deleveraging of its balance sheet.

It has generated proceeds of about $990 million (£740 million) after its 56%-owned subsidiary United Spirits sold Indian cricket franchise Royal Challengers Bengaluru in a deal worth $1.8 billion.

Diageo inherited the IPL cricket franchise following its acquisition of United in 2015. UBS, which has a price target of 1,730p, believes Diageo has the scope to generate a further $5 billion from other disposals to get its debt/earnings ratio down to between 2.5 and 3 times.

While it said the stock may look cheap on a multiple of 12 times forecast earnings, the bank remains cautious on the weak US spirits industry and Diageo’s own market share performance.

Biggest FTSE 100 losers since Iran war began

Source: ShareScope. Past performance is not a guide to future performance.

Precious metal stocks led today’s FTSE 100 risers board after a push back against higher US interest rate expectations helped the price of non-yielding gold to about $4,541 an ounce.

Endeavour Mining (LSE:EDV) rose 196p to 4,324p although the West Africa-based miner is still 19% lower after the case for further Federal Reserve rate cuts was undone by surging energy prices.

The best-performing miner since the start of the war has been Glencore (LSE:GLEN) as it benefits from a 17-month high for the price of coal as power generators switch from gas. Shares in the world’s largest seaborne thermal coal exporting company are flat since the start of the war at 536.1p.

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Bank of America this week lifted its price target to 610p after raising its forecast for the 2026 average Newcastle coal price to $150 a tonne, with a peak of $170 in the second quarter.

It said: “Elevated gas prices should encourage more gas-to-coal switching. This is adding upward pressure to thermal coal prices, at a time when China and Indonesia, the world’s largest coal producers, have already been looking to rein in supply to support prices.