Sector movers: Personal goods knocked, banks boosted

Retailers and personal goods companies were not well liked on Wednesday, while banks were higher despite the travails of Metro Bank.

Personal goods were down after a profit warning from Ted Baker and Germany's Beiersdorf.

The FTSE 250 fashion retailer warned that profit will be down on the previous year as it takes a hit from currency movements, additional costs following the transition to new systems and a writedown in the value of older stock.

While the implication from the Beiersdorf "resets", following similar moves form Henkel and Colgate, is that around €500m of extra investment in growth for mass health and personal care category, affecting the likes of Unilever and Reckitt Benckiser, which were down 3% and 1% respectively, with PZ Cussons down 0.6%.

"This is bound to up the ante for Unilever, who compete with all three of the resetters in big categories like skincare, haircare, dentifrice and laundry," said analysts at Jefferies. "We therefore expect the credibility of ULVR's 2020 margin target to be the subject of even greater debate. And if BEI think the game is up at 15% margins, and with all the economies of scale that flow from a mono-brand strategy with Nivea, what price RB, with 27% margins?"

Following gains earlier in the week on optimism about Brexit, retailers were down on Wednesday but banks were in demand.

Marks & Spencer was a drag on the retail sector after it said it would need to slash its dividend 40% and conduct a rights issue to raise up to £600m to fund the acquisition of a 50% share in Ocado’s UK online grocery retail business.

Metro Bank was a big faller after it reported a solid set of full year results but cut its growth targets overnight, as well as announcing an emergency fundraising and saying that financial regulators were to investigate its accounting error last month.

However, Lloyds, Barclays and RBS were all higher, along with small gains for HSBC and CYBG.

A note from credit agency Moody's was a positive factor, with analysts suggesting that a no-deal Brexit would put pressure on UK banks' asset quality and profitability, "but strong capital and liquidity mean that overall credit fundamentals would remain broadly resilient".

Under a no-deal scenario, Moody's expect the sector to "remain profitable, albeit weakly so, and the continued retention of profits to help offset the impact on banks' capital ratios of an increase in provisions and risk-weighted assets as risk models take account of a weakening environment".

While house prices would soften and there would be reduced activity in the residential real estate market, there is less concern for the banks exposure to the market after improvements in underwriting standards over the last decade, limited lending at high loan-to-value ratios and the focus of the rated large bank lenders and building societies on the prime residential and buy to let markets.

Top performing sectors so far today

Leisure Goods 7,644.64 +1.49%

Electricity 7,210.74 +0.49%

Banks 3,804.44 +0.46%

Software & Computer Services 2,056.48 +0.36%

Automobiles & Parts 7,421.92 +0.34%

Bottom performing sectors so far today

Personal Goods 34,735.32 -3.19%

General Retailers 2,198.59 -2.80%

Forestry & Paper 20,786.97 -2.33%

Food Producers & Processors 7,017.52 -2.02%

Chemicals 13,834.63 -1.89%

Market Movers

FTSE 100 (UKX) 7,095.20 -0.78%
FTSE 250 (MCX) 19,131.88 -0.72%
techMARK (TASX) 3,461.69 -0.71%

FTSE 100 - Risers

Taylor Wimpey (TW.) 177.15p 3.63%
Ocado Group (OCDO) 1,022.25p 3.26%
Persimmon (PSN) 2,450.00p 2.25%
Lloyds Banking Group (LLOY) 63.12p 1.96%
Barclays (BARC) 167.86p 1.80%
Micro Focus International (MCRO) 1,899.00p 1.66%
Royal Bank of Scotland Group (RBS) 264.10p 1.58%
Barratt Developments (BDEV) 594.80p 0.95%
Rio Tinto (RIO) 4,423.50p 0.85%
SSE (SSE) 1,198.50p 0.80%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 268.38p -11.49%
NMC Health (NMC) 2,612.00p -4.53%
Hiscox Limited (DI) (HSX) 1,575.00p -3.61%
St James's Place (STJ) 942.40p -3.52%
Unilever (ULVR) 3,983.00p -3.25%
Pearson (PSON) 831.60p -3.23%
Associated British Foods (ABF) 2,246.00p -3.15%
TUI AG Reg Shs (DI) (TUI) 807.40p -3.14%
International Consolidated Airlines Group SA (CDI) (IAG) 597.80p -3.11%
ITV (ITV) 127.32p -3.03%

FTSE 250 - Risers

Capita (CPI) 122.30p 3.91%
Playtech (PTEC) 430.00p 3.24%
SIG (SHI) 125.43p 3.23%
Plus500 Ltd (DI) (PLUS) 793.50p 2.65%
Galliford Try (GFRD) 746.00p 2.33%
Rank Group (RNK) 166.00p 2.22%
TalkTalk Telecom Group (TALK) 101.10p 2.17%
Polypipe Group (PLP) 416.20p 2.11%
Weir Group (WEIR) 1,630.50p 2.10%
TI Fluid Systems (TIFS) 185.20p 1.76%

FTSE 250 - Fallers

Metro Bank (MTRO) 975.02p -25.00%
Ted Baker (TED) 1,788.00p -10.60%
Centamin (DI) (CEY) 92.64p -4.42%
Pagegroup (PAGE) 442.80p -4.16%
Acacia Mining (ACA) 218.30p -2.98%
Dechra Pharmaceuticals (DPH) 2,362.00p -2.96%
Meggitt (MGGT) 535.00p -2.90%
Contour Global (GLO) 173.00p -2.81%
Superdry (SDRY) 527.50p -2.76%
Wizz Air Holdings (WIZZ) 3,085.00p -2.71%