FTSE 100 slips as ex-dividend trades weigh, Rolls-Royce soars

By Shashwat Chauhan and Shristi Achar A

(Reuters) -The FTSE 100 ended lower on Thursday, as several banking and healthcare heavyweights traded ex-dividend, although shares of Rolls-Royce zoomed more than 20% after the aeroplane engine maker reported upbeat results.

The blue-chip index was down 0.3%, declining for a third straight session.

Shares of banks including Barclays and Standard Chartered and healthcare majors AstraZeneca and GSK slipped as they traded without entitlement for dividend payout.

Limiting losses on the FTSE 100 however Rolls-Royce surged 23.7% to post its biggest percentage gain in more than two years after the company's CEO forecast more profit growth in 2023.

"There was a lot of concern coming into this year generally about margins, results and (if) companies would be able to maintain their margins," said Caroline Simmons, UK chief investment officer at UBS Global Wealth Management.

"But what we've been seeing is so far the results have been broadly okay."

The FTSE 250 midcap index rose 0.6%, with John Wood Group Plc jumping 29.0% to the top of the index after the oilfield services and engineering firm said it received and rejected takeover proposals from Apollo Global Management.

Meanwhile, Bank of England interest rate-setter Catherine Mann said that it was too soon to say the risks posed by the surge in inflation last year had eased and that the central bank should continue to raise borrowing costs.

"Right now, the main driver for equities is just this reassessment of whether we have in fact priced peak rates, even if it means the recession is not coming," said Michael Metcalfe, head of macro strategy at State Street Global Markets.

Strong economic data in January has shaken investor confidence, he added.

Among other single stocks, Mondi fell 4.8% after the paper packaging company gave a cautious outlook.

Drax Group lost 3.7% as analysts said falling forward sales could hit the power generation firm's core earnings in 2024. The company posted annual profit that beat analysts' expectation.

(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; editing by Uttaresh.V, Eileen Soreng and Andrew Heavens)