London’s FTSE 100 was down 2.5% at 7,057.38 in afternoon trade on Friday.
Corrugated packaging company Smurfit Kappa was the biggest faller, followed by Irish building materials group CRH and luxury brand Burberry.
ITV slumped again after Barclays downgraded its stance on the broadcaster to ‘equalweight’ from ‘overweight’ and cut the price target to 95p from 160p following results a day earlier.
The company’s shares slid on Thursday after it said revenue rebounded from the Covid-10 crisis but investors were concerned about its spending plans. ITV said it would invest about £1.23bn in content in 2022 as part of a plan to double digital revenue to at least £750m by 2026.
It will also invest £20m in digital-first content in 2022 and £160m in 2023 for its ITVX integrated streaming platform which will launch in the fourth quarter.
Barclays said its upgrade of the shares at the end of January was based on short-term advertising momentum leading to upgrades; hope of better disclosure which should have helped the medium-term case; and valuation.
“Short-term advertising is indeed much better than consensus but the upgrades we hoped for have turned into a significant downgrade (30%+) because ITV has decided to double down on AVOD/SVOD and disclosure has not improved,” the bank said.
“In our view, ITV is investing more than expected to end up where we thought they would be in 2026E. This might dramatically increase their chances of making it but this comes at a cost of declining earnings in FY22E and FY23E.”
Going the other way, Russian steelmaker Evraz and gold miner Polymetal – which has operations in Russia – were the standout gainers, powering to the top of the index following recent heavy losses.
Precious metals miner Fresnillo also shone as gold prices benefited from safe haven demand.
FTSE 100 – Risers
Evraz (EVR) 91.38p 72.09%
Polymetal International (POLY) 224.50p 26.41%
Fresnillo (FRES) 733.80p 7.41%
London Stock Exchange Group (LSEG) 7,200.00p 3.09%
Admiral Group (ADM) 2,607.00p 2.64%
SSE (SSE) 1,595.00p 1.88%
Coca-Cola HBC AG (CDI) (CCH) 1,626.00p 1.66%
United Utilities Group (UU.) 1,063.00p 1.09%
Hargreaves Lansdown (HL.) 1,004.00p 0.84%
Severn Trent (SVT) 2,878.00p 0.56%
FTSE 100 – Fallers
Smurfit Kappa Group (CDI) (SKG) 3,011.00p -9.06%
CRH (CDI) (CRH) 2,991.00p -8.14%
Burberry Group (BRBY) 1,651.00p -7.82%
ITV (ITV) 74.22p -7.48%
Intermediate Capital Group (ICP) 1,441.50p -6.58%
Rolls-Royce Holdings (RR.) 89.04p -6.27%
Ashtead Group (AHT) 4,576.00p -6.19%
BT Group (BT.A) 169.50p -6.15%
Melrose Industries (MRO) 122.35p -5.81%
Smiths Group (SMIN) 1,399.00p -5.79%