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Sector movers: Utilities sought out amid global trade tensions, market volatility
Investors sought out the safety of electricity and water utilities amid the ongoing volatility in global capital markets as a result of the ongoing trade tensions.
Even as many markets observers appeared to be taking comfort from the less combative tone of the White House's chief economic adviser Larry Kudlow on Thursday evening, and even from the US president himself, overnight Trump indicated he had instructed the country's Trade Representative to consider whether a further $100bn of tariffs on Chinese goods should be imposed.
To take note of perhaps, one well-known City-based analyst said the US had in fact 'blinked', while another pointed to recent gains in the president's poll ratings, which had been near all-time lows.
Whatever the case, on Friday Beijing responded to the latest message from the Oval Office, with Chinese Commerce Ministry spokesman Gao Feng saying his country would retaliate "immediately" if Washington published a new list of tariffs.
Against that backdrop, shares of Drax and United Utilities were both moving sharply higher, with the latter helped by supportive comments out of Deutsche Bank.
The German broker pointed out how UK utilities had surrendered nearly a quarter of their value over the past year, due to a mix of regulatory, competitive and political risks, water utilities now looked "increasingly attractive".
In the same research note, Deutsche upgraded its recommendation for Pennon from 'hold' to 'buy', although it lowered its target price from 840p to 720p, alongside cuts to those for Severn Trent (from 2200p to 1850p) and National Grid (from 850p to 780p).
Nevertheless, the broker also reiterated its 'sell' on shares of SSE and Centrica, warning that both companies' dividends were at risk.
Tesco and Sainsbury accounted for strength among food retailers, with the former boosted by an upgrade from analysts at Berenberg, who also hiked their target for the shares from 190p to 255p.
The same German broker also lifted its view on Morrison from 'sell' to 'hold', although the grocer's shares failed to find a bid on the back of the news.
Going the other way were Oilfield Services and Mining, with the renewed trade tensions acting as the main drag, amid talk that America's shale industry might be the next target in any future tariffs by China.
Top performing sectors so far today
Electricity +2.04%
Fixed Line Telecommunications +1.40%
Software & Computer Services +1.24%
Gas, Water & Multiutilities +0.92%
Food & Drug Retailers +0.80%
Bottom performing sectors so far today
Leisure Goods -3.96%
Oil Equipment, Services & Distribution -1.95%
Mining -1.74%
Industrial Metals & Mining -1.44%
Industrial Engineering -1.20%