FTSE led lower as Smiths Group and banks fall despite gains by Unilever

THE FTSE 100 closed down 25.06 points, or 0.5 per cent, at 5,573.42, after gaining 1.6 per cent last week, with Smiths Group out of favour while Unilever rose after a US acquisition.

Broker recommendation and target price changes were behind some of the individual equity moves. Smiths shed 1.6 per cent after Bank of America Merrill Lynch cut its rating for the engineering group to "neutral" from “buy” in a review of the UK Capital Goods sector.

The broker said it downgraded Smiths due to the stock's re-rating and high US but low emerging market sales exposure, while leaving its target price unchanged at 1,350p.

Software firm Sage Group, meanwhile, topped the blue-chip leader board, while peer Autonomy was another good gainer after Barclays Capital initiated coverage on the European Software/IT services sector with a 1-Positive view.

Sage, which BarCap started as “equal-weight,” and Autonomy, which the broker initiated as "overweight" and counts among its top picks, advanced 3.1 per cent and 1.6 pe rcent respectively.

A price target hike from Goldman Sachs helped miner Kazakhmys climb 1.5 per cent.

Unilever climbed 1.3 per cent after the consumer goods group agreed to buy United States-based hair care group Alberto Culver for $3.7bn in cash to boost its personal care business.

On the downside, Wolseley, the world’s biggest plumbing, heating and building materials company, lost 0.7 per cent after it posted flat year profit. It plans to move its tax status to Switzerland in search of tax savings. Banks were also weaker, down 0.8 per cent.