Sector movers: Banks brought lower, food retailers on the menu

Bank investors looked askance at HSBC as the villain of the piece on Tuesday, while food retailers were led higher by star baker Greggs and encouraging economic data.

Fourth-quarter results from global banking colossus HSBC disappointed on revenues, costs, capital and earnings. Adjusted net profits for the fourth quarter were down to $3.4bn, falling well short of a consensus estimate for $4.4bn. That was despite a 5.0% rise in adjusted revenues to $12.56bn, though this was also shy of expectations. Fellow Asia-focused banking giant Standard Chartered was also knocked lower.

"HSBC has been the big underperformer in the FTSE 100 today, as the bank suffers at the hands of continued trade uncertainty between the US and China," said Joshua Mahony, senior market analyst at IG. "The bank straddles Asia and the West, which brings an acute susceptibility to the slowdown in China. Interestingly, the bank posted a more than healthy 16% rise in pre-tax profits, yet traders remain sceptical given the negative impact the US-China trade spat is having."

FTSE 350 oil services companies and producers were almost all trading down as oil prices retreated, with a barrel of Brent costing 0.7% less at $66.03.

"Oil has dipped as traders take their profit on the three-month high that was reached yesterday," said market analyst David Madden at CMC Markets. "It was reported that Saudi Arabia’s shipped volumes dropped by over 20% in the first-half of February, compared with January, which underlines their commitment to trimming output."

Food retailers, including Tesco, Morrisons and Sainsbury's were higher, thought leading the sector was Geordie baker Greggs after its unscheduled trading update in the morning.

Greggs said it had enjoyed an "exceptionally strong start to 2019", boosted by helpful publicity for its new sausage roll.

Analyst Laith Khalaf at Hargreaves Lansdown said: "The new vegan sausage roll has helped bring home the bacon for Greggs, prompting a spike in sales at the start of this year. The company has therefore upgraded its profit expectations for the coming year, and that’s sent the share price up sharply.

"It’s unclear how much of the boom can be attributed to sales of actual vegan rolls rather than simply the publicity associated with the launch."

Further boosting the sector was confirmation from the Office for National Statistics that UK wage growth has remained well above inflation, boding well for consumer spending in coming months.

Analyst Clive Black at Shore Capital said that while "shambles" and "chaos" in Westminster is continuing to worry households, on the economic side there is record levels of employment, historically low unemployment and real wages rising by around 1.5%.

"What this tells us perhaps is that if an agreement can be reached with the EU then the British consumer economy could be strong. As for a 'No Deal', well who knows?"

Top performing sectors so far today

Food & Drug Retailers 3,864.22 +1.57%

Food Producers & Processors 7,145.62 +0.94%

Software & Computer Services 2,024.40 +0.91%

Gas, Water & Multiutilities 5,052.77 +0.80%

Insurance (non-life) 3,212.73 +0.53%

Bottom performing sectors so far today

Banks 3,780.53 -2.76%

Oil Equipment, Services & Distribution 10,416.83 -1.26%

Industrial Engineering 11,501.98 -1.19%

Financial Services 9,771.20 -1.12%

Mobile Telecommunications 3,123.95 -1.11%

Market Movers

FTSE 100 (UKX) 7,177.83 -0.58%
FTSE 250 (MCX) 19,069.86 -0.30%
techMARK (TASX) 3,531.83 -0.06%

FTSE 100 - Risers

Micro Focus International (MCRO) 1,814.50p 3.77%
TUI AG Reg Shs (DI) (TUI) 852.80p 3.24%
Coca-Cola HBC AG (CDI) (CCH) 2,639.00p 2.93%
Carnival (CCL) 4,374.00p 2.01%
United Utilities Group (UU.) 846.00p 1.88%
Severn Trent (SVT) 2,015.42p 1.71%
Antofagasta (ANTO) 892.40p 1.62%
Fresnillo (FRES) 995.00p 1.53%
Tesco (TSCO) 226.50p 1.43%
Associated British Foods (ABF) 2,351.00p 1.42%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 634.00p -4.47%
GVC Holdings (GVC) 613.00p -2.70%
BAE Systems (BA.) 512.20p -2.40%
Melrose Industries (MRO) 168.05p -2.18%
Wood Group (John) (WG.) 512.40p -1.99%
Reckitt Benckiser Group (RB.) 6,180.00p -1.84%
Standard Chartered (STAN) 617.10p -1.81%
Rentokil Initial (RTO) 347.60p -1.78%
St James's Place (STJ) 931.40p -1.73%
Ferguson (FERG) 5,375.00p -1.45%

FTSE 250 - Risers

Greggs (GRG) 1,766.00p 10.24%
FirstGroup (FGP) 96.00p 4.92%
Cobham (COB) 120.25p 4.29%
Dairy Crest Group (DCG) 505.00p 3.82%
Galliford Try (GFRD) 706.79p 3.03%
Centamin (DI) (CEY) 127.60p 2.74%
Polypipe Group (PLP) 409.80p 2.60%
Pennon Group (PNN) 786.36p 2.58%
Ferrexpo (FXPO) 268.90p 2.24%
Greene King (GNK) 639.24p 2.05%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 714.70p -11.38%
Indivior (INDV) 107.70p -8.96%
Playtech (PTEC) 365.20p -4.87%
FDM Group (Holdings) (FDM) 831.00p -4.26%
IP Group (IPO) 105.00p -3.67%
Mediclinic International (MDC) 308.40p -3.50%
UDG Healthcare Public Limited Company (UDG) 562.00p -3.35%
Restaurant Group (RTN) 130.80p -3.25%
Rank Group (RNK) 162.00p -3.11%
Pagegroup (PAGE) 449.80p -3.06%