Sector movers: Banks, builders, utilities cower as govt wobbles over Brexit
By Oliver Haill
Date: Thursday 15 Nov 2018
(Sharecast News) - Banks, housebuilders and utility companies were under the cosh on Thursday as may UK-facing stocks suffered, while miners gleamed.
Although Theresa May's cabinet "collectively approved" a withdrawal agreement with the European Union overnight, Thursday's resignations of two senior ministers, two junior ministers, two aides and one Conservative party vice-chairman, along with calls for a vote of no confidence in the Prime Minister raised doubts about the Brexit and the future of the government.
Domestically focused banks, from RBS, Lloyds, Barclays to challengers CYBG and Metro, all slumped, though with a smaller reliance on the UK, HSBC and Standard Chartered were in positive territory.
This was due to rising fears over a no-deal Brexit, said Joshua Mahony, market analyst at IG. "Lower interest rate hike expectations, coupled with the fear that a no-deal Brexit could bring chaos to trade, are raising worries over the performance of UK banks going forward."
A no-deal Brexit could create major hurdles for banks and more importantly seriously damage the economy. Credit-default swaps insuring UK financial sector debt surged on Thursday levels in years, showing that traders are betting against banks' and insurers' creditworthiness. Furthermore, wobbles for May and the government could potentially lead to a general election and catapult the Labour Party's Jeremy Corbyn to power, something much feared by the City.
"The absolutely scary thing happening today is that a deal that could get done might not get done, and he could get in," said Alasdair Haynes, the chairman of trading firm Aquis Exchange, according to Bloomberg. "If we have a hard Brexit and Corbyn, that's armageddon."
For similar reasons, housebuilders also retreated, with Barratt Developments, Persimmon, Taylor Wimpey and Berkeley all in the red.
Confidence in the builders was also dented by an update from Bovis Homes, which warned that uncertainty about Brexit had put off discretionary homebuyers.
George Salmon, equity analyst at Hargreaves Lansdown, said: "Brexit is proving to be a fly in the ointment [for the likes of Bovis]. The housing market is already slowing, and the worry is it grinds to a halt in the event of a disorderly Brexit - which would clearly be bad news for the builders. A weak secondary market means around 15% of Bovis' transactions now rely on part-exchange, hardly reassuring. Overall, the sector looks something of a binary bet at the moment."
Fears about a Corbyn government and his party's plans for bringing water and energy companies back into public arms, hit the likes of Centrica, SSE, United Utilities and Severn Trent.
However, balancing out those areas of weakness, investors rushed for an strength and shifting cash into gold miners, sending Randgold Resources and Fresnillo to the top of the pile.
"Gold has crept higher today despite the rally in the US dollar," said David Madden at CMC Markets, looking at the wider market picture. "Lately there has been a strong inverse relationship between the US dollar and the metal, and seeing as gold has risen to today, it makes the upward move all the more impressive. The uncertainty in global equity markets are driven to traders into risk-off mode, and that is helping gold."
Top performing sectors so far today
Technology Hardware & Equipment 949.62 +4.51%
Industrial Metals & Mining 4,976.12 +3.09%
Oil Equipment, Services & Distribution 13,277.64 +2.75%
Beverages 22,211.90 +2.25%
Personal Goods 36,275.62 +1.77%
Bottom performing sectors so far today
Electricity 6,730.06 -7.39%
Leisure Goods 7,420.17 -5.41%
Industrial Transportation 2,398.05 -5.16%
Food & Drug Retailers 3,525.34 -4.14%
Life Insurance 7,414.78 -3.85%
Market Movers
FTSE 100 (UKX) 6,986.66 -0.67%
FTSE 250 (MCX) 18,518.55 -2.07%
techMARK (TASX) 3,370.58 -0.50%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,346.00p 5.59%
Fresnillo (FRES) 850.40p 3.99%
Antofagasta (ANTO) 790.40p 3.75%
Evraz (EVR) 538.80p 3.66%
Wood Group (John) (WG.) 654.20p 3.02%
Smiths Group (SMIN) 1,419.00p 2.53%
Rio Tinto (RIO) 3,792.00p 2.21%
Relx plc (REL) 1,622.00p 2.21%
Coca-Cola HBC AG (CDI) (CCH) 2,369.00p 2.16%
Sage Group (SGE) 560.00p 1.97%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 225.30p -9.19%
Taylor Wimpey (TW.) 150.10p -7.40%
Persimmon (PSN) 2,179.70p -7.33%
3i Group (III) 797.80p -7.23%
Barratt Developments (BDEV) 507.00p -7.11%
Severn Trent (SVT) 1,806.50p -6.88%
Royal Mail (RMG) 325.05p -6.59%
ITV (ITV) 148.50p -6.46%
Legal & General Group (LGEN) 246.00p -6.36%
Berkeley Group Holdings (The) (BKG) 3,429.00p -6.26%
FTSE 250 - Risers
Centamin (DI) (CEY) 98.12p 5.01%
Spirent Communications (SPT) 120.60p 4.69%
Intermediate Capital Group (ICP) 961.50p 4.06%
Fidelity China Special Situations (FCSS) 200.50p 3.24%
Spirax-Sarco Engineering (SPX) 6,785.00p 2.96%
Hochschild Mining (HOC) 154.70p 2.76%
Templeton Emerging Markets Inv Trust (TEM) 684.00p 2.70%
Spectris (SXS) 2,144.00p 2.63%
JPMorgan Emerging Markets Inv Trust (JMG) 809.30p 2.57%
JPMorgan Indian Investment Trust (JII) 637.00p 2.41%
FTSE 250 - Fallers
Capita (CPI) 109.00p -13.32%
Countryside Properties (CSP) 280.00p -10.08%
OneSavings Bank (OSB) 352.80p -8.32%
Bovis Homes Group (BVS) 956.30p -8.09%
Sanne Group (SNN) 557.00p -7.93%
Contour Global (GLO) 156.90p -7.92%
Kier Group (KIE) 807.00p -7.77%
Premier Oil (PMO) 86.45p -7.74%
Redrow (RDW) 521.50p -7.45%
Paragon Banking Group (PAG) 403.60p -7.35%
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