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Sector movers: Next outlook lifts retailers, life insurers lead fallers
Friday saw retailers the top rising sector on the back of final results from high street bellwether Next, while life insurers and banks were the main fallers.
Next's results, while showing profits down 8% and guided to be down again this year, offered enough rays of light to provide encouragement for the wider retail sector.
Kingfisher, Marks & Spencer, Dunelm, Pets at Home, Dixons Carphone and Ted Baker were on the leaderboard as investors found positives, as well put by Chris Beauchamp, chief market analyst at IG: "After a week of high street disaster, Next's figures came as something of a relief, and even they weren't exactly inspiring there was still reason for hope.
"The continued rally in the pound should help lift pressure on margins, and if you've had the toughest quarter in 25 years, and survived, the balance of probability suggests that the coming few quarters will be better. And with wages looking up following this week's data, there is perhaps room for guarded optimism."
Likewise, Jamie Constable at broker N+1Singer noted that the pricing environment looks to be improving, helped by forex, with "nothing like" the profit attrition in 2019 as 2018, with little or no decline in consumer real incomes in calendar 2018.
On the downside, ahead of the holiday-shorted Easter week, life insurers and banks were virtually all lower, led by Aviva, Old Mutual and Legal & General. They were likely to be weighed down by the retreat in longer-term government yields the day before and overnight on both sides of the Atlantic.
Also weighing on financials more generally perhaps, earlier in the session strategists at BoA-Merrill Lynch cautioned clients against being overly confident, as many investors appeared to be according to the results of their most recent survey of fund managers and the asset allocations of its clients.
In their opinion, where investors were most vulnerable to downward surprises was: "lower stocks, higher Chinese yuan, lower bond yields on peaking PMI/EPS [...] financials, tech, EAFE most vulnerable."
Top performing sectors so far today
General Retailers 2,306.84 +1.69%
Tobacco 42,372.21 +1.22%
Electricity 7,226.39 +1.07%
Software & Computer Services 1,643.18 +1.00%
Pharmaceuticals & Biotechnology 11,888.18 +0.94%
Bottom performing sectors so far today
Life Insurance 8,561.74 -2.15%
Banks 4,190.37 -1.85%
General Industrials 6,412.40 -1.48%
Insurance (non-life) 3,093.13 -1.32%
Electronic & Electrical Equipment 6,243.08 -1.31%