LONDON (ShareCast) - Defensive sectors were benefiting from their ‘safe-haven’ attributes on Thursday as investors scaled back risk ahead of some key meetings of world leaders in the coming weeks, starting with the eagerly-anticipated Jackson Hole symposium which begins later this evening.

Whether or not Federal Reserve Chairman Ben Bernanke will hint at further easing measures during his speech at the central bankers’ meeting in Wyoming tomorrow, investors seemed keen not to build any positions in sectors such as mining and construction, two cyclical categories often highly correlated with the global economy.

Instead, they seemed push into non-cyclical sectors like tobacco, food and drug retailers, beverage and utilities. These categories tend to perform well in spite of swings in the economic outlook, due to consumers' needs for their products and services.

As such, the top four performers on the Footsie by the close (in order) were supermarket giant Morrison, cigarettes manufacturer British American Tobacco, Guinness maker Diageo and water supplier Severn Trent.

According to analysts at UniCredit this afternoon, the Jackson Hole conference, along with the European Central Bank (ECB) meeting on September 6th and the German Constitutional Court ruling on the European Stability Mechanism on September 12th, are the important “risk” events that could potentially lead to significant volatility on markets in the next couple of weeks.

“In this environment, investors are likely to adopt a cautious approach and wait for more clarity from central banks and politicians in the near term.”


Top performing sectors so far today
Tobacco 37,677.63 +1.05%
Food & Drug Retailers 4,177.97 +0.75%
Beverages 12,769.18 +0.71%
Gas, Water & Multiutilities 5,311.76 +0.53%
Electricity 8,512.45 +0.41%

Bottom performing sectors so far today
Industrial Metals & Mining 2,356.50 -3.17%
Automobiles & Parts 4,966.05 -2.75%
Mining 17,041.20 -2.70%
Industrial Engineering 7,040.05 -1.72%
Construction & Materials 3,173.55 -1.58%

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