LONDON (ShareCast) - (ShareCast News) - Price action at the start of the week saw both cyclical and defensive 'plays' battle it out for market leadership, with Ibstock and NMC Health pacing gains among Health Care and Construction-related issues, respectively, while retailers dropped ahead of (post-Brexit) CPI figures due out the next day.
Pharmaceuticals & Biotechnology also put in a strong performance led by stock in Genus after the US district court of Wisconsin handed down its verdict on the patent infringement claims brought against the animal genetics specialist by rival Inguran.

Analysts at house broker Peel Hunt and independent VSA Capital said the ruling was a "positive outcome" and that the sell-off in the shares was an overreaction.

Shares in oil & gas producers also figured prominently near the top of the leaderboard amid continued market speculation that OPEC and major oil-producing nations from outside the cartel, such as the Russian Federation, might yet reach an agreement on an output freeze when they meet in September.

Although reports to that effect sent crude oil futures higher at the start of the week, some analysts voiced their skepticism.

"[...] With Iran at or near its short-term capacity [a deal to freeze output] is not out of the question," analysts at SocGen said in a research note sent to clients.

Nevertheless, an agreement would only serve to bolster sentiment, they added, because Russia, Iraq and Iran were "maxed out or close to it" and Saudi output would diminish anyhow following its seasonal peak in Summer.

CPI, post-Brexit data ahead

Retailers (and Real Estate & Services) were weaker as investors bided their time ahead of the release of the consumer price data the next day.

Many economists expected inflation to be one of the pieces of the macroeconomic jigsaw which would move the most in the aftermath of the referendum vote, dealing a blow to consumers' spending power.

"Markets expect RPI inflation-which still is used to calculate index-linked gilt payments, negotiate wage settlements, and revalue excise duties-to rise to only 2.7% a year from now, from 1.6% in June. By contrast, we expect RPI inflation to leap to 3.5%. As we outlined in yesterday's Monitor which previewed today's numbers, CPI inflation likely will shoot up to 3% from 0.5% over the next year. RPI inflation should remain a significant margin above CPI inflation, despite the housing market slowdown," Pantheon Macroeconmics's chief UK economist Samuel Tombs said in a research report sent to clients.

Tombs was forecasting a 0.6% year-on-year rise in July CPI in part as the weakening in Sterling - which began in November - began to filtre through into the prices of alcohol and food.

To take note of too, average house prices in Brtain fell at a 1.2% clip month-on-month in August, Rightmove revealed, their biggest drop since last November.

Nonetheless, the price-comparison website put that down, in part, to many prospective buyers taking a break from home-hunting during the summer.

Furthermore, those which did come to market at that quieter time of year tended to price more aggressively, said Miles Shipside, Rightmove director and housing market analyst.

Top performing sectors so far today
Health Care Equipment & Services 8,107.94 +1.16%
Industrial Metals & Mining 1,711.71 +1.05%
Pharmaceuticals & Biotechnology 15,026.09 +0.97%
Construction & Materials 6,031.72 +0.89%
Oil & Gas Producers 7,284.90 +0.80%

Bottom performing sectors so far today
Food & Drug Retailers 2,597.45 -1.21%
Oil Equipment, Services & Distribution 14,931.33 -1.14%
General Retailers 2,689.62 -0.42%
Real Estate Investment & Services 2,413.09 -0.35%
Fixed Line Telecommunications 4,534.31 -0.31%

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