Sector movers: Construction and defence subside

Construction, defence and most of the industrials and support services sectors were under fire on Tuesday, while the some in the drinks industry were given a Brexit boost.

All stocks in the construction sector were in the red despite positive top-line data in the morning's purchasing managers' index survey from IHS Markit.

The seasonally adjusted UK construction PMI inched up to 53.4 in November from 53.2 in October, while the market had expected a decline to 52.5.

Housebuilding was the fastest growing area during the month, climbing to its strongest rate for three months, while both commercial work and civil engineering activity both remained in positive territory.

However, some firms blamed Brexit uncertainty for holding back new order growth, while others cited delays to public sector spending decisions. "Survey respondents widely commented that Brexit-related uncertainty had held back business optimism in November," said Markit's Tim Moore.

Concerns sparked by Kier on Friday, as the construction and services group announced a surprise rights issue, continue to dog the sector, with the company and the likes of Keller, Balfour Beatty and Ibstock down for the third day in a row and CRH giving up its gains from the previous session.

"Kier’s announcement of a 'rescue' rights on Friday is likely to set people focusing in on debt again and not only in the construction sector," said Jamie Constable at broker N+1Singer. "A further thought on debt is on those companies who are said to have asset backing. In many cases this asset backing is likely to be property. With the quoted property companies trading on discounts of 30% + and even 40% plus are we reaching a point when the banks start to question the value of the covenant on the debt."

The aerospace and defence sector was weighed down as BAE Systems and Rolls Royce were downgraded to 'neutral' and 'underperform', respectively, by analysts at Bank of America Merrill Lynch.

Industrials and services companies seemed to be under pressure amid doubts around the specifics of the trade truce agreed by the US and China at the weekend and perhaps also concerns around the outlook for economic growth in the US and Brexit in the UK.

"Away from the relief that an escalation has been averted it still isn’t immediately clear what each side has agreed to implement, given some of the claims being made by President Trump around the reducing and removal of tariffs on US made auto imports onto the Chinese mainland," said analyst Michael Hewson of CMC Markets.

"This claim doesn't appear in the declaration over what was agreed by both sides at the weekend, so it’s not immediately apparent why the US President believes that China has agreed to this."

The drinks sector was one of the risers, mainly on the back of a gain for FTSE 100 giant Diageo.

This came on the same day that the Scotch Whisky Association backed gave its backing to Theresa May’s Brexit deal. The body, which represents firms such as Diageo, said that “on balance” the withdrawal agreement and the political declaration on future UK-EU relationship “stand up well against the Scotch whisky industry’s Brexit priorities”.

Scotch whisky exports are worth about £4.4bn a year, making it the UK’s largest single food and drink commodity.

However, despite this support, the consensus opinion remains that May's deal is unlikely to make it through parliment in its current form.

Top performing sectors so far today

Fixed Line Telecommunications 3,030.74 +2.08%
Health Care Equipment & Services 7,307.02 +1.27%
Beverages 22,729.10 +0.99%
Oil & Gas Producers 8,954.28 +0.39%
Personal Goods 36,715.18 +0.37%

Bottom performing sectors so far today

Construction & Materials 5,143.91 -3.48%
Aerospace and Defence 4,580.25 -3.21%
Oil Equipment, Services & Distribution 12,817.68 -2.85%
Industrial Transportation 2,314.45 -2.32%
General Industrials 5,277.20 -2.28%

Market Movers

FTSE 100 (UKX) 7,035.77 -0.38%
FTSE 250 (MCX) 18,376.73 -1.01%
techMARK (TASX) 3,465.69 -0.51%

FTSE 100 - Risers

Fresnillo (FRES) 804.20p 4.22%
Randgold Resources Ltd. (RRS) 6,462.00p 3.23%
Sage Group (SGE) 594.40p 2.66%
BT Group (BT.A) 262.60p 2.34%
Smith & Nephew (SN.) 1,466.50p 2.20%
Land Securities Group (LAND) 820.20p 1.69%
Evraz (EVR) 495.90p 1.45%
Diageo (DGE) 2,861.50p 1.33%
Coca-Cola HBC AG (CDI) (CCH) 2,451.00p 1.20%
GlaxoSmithKline (GSK) 1,513.80p 1.05%

FTSE 100 - Fallers

BAE Systems (BA.) 473.80p -5.43%
GVC Holdings (GVC) 738.00p -5.02%
Ferguson (FERG) 4,947.00p -4.85%
Melrose Industries (MRO) 175.25p -4.42%
ITV (ITV) 137.50p -4.25%
Smith (DS) (SMDS) 330.30p -4.18%
TUI AG Reg Shs (DI) (TUI) 1,114.50p -4.05%
Smurfit Kappa Group (SKG) 2,136.00p -3.78%
Just Eat (JE.) 580.40p -3.27%
Johnson Matthey (JMAT) 2,858.00p -3.25%

FTSE 250 - Risers

Thomas Cook Group (TCG) 24.37p 3.09%
Vivo Energy (VVO) 120.28p 2.98%
Dechra Pharmaceuticals (DPH) 2,210.00p 2.31%
Indivior (INDV) 100.90p 2.10%
Polymetal International (POLY) 796.20p 2.02%
Great Portland Estates (GPOR) 693.30p 1.96%
BlackRock Smaller Companies Trust (BRSC) 1,221.90p 1.83%
IntegraFin Holding (IHP) 299.95p 1.47%
Ashmore Group (ASHM) 384.20p 1.43%
CLS Holdings (CLI) 218.50p 1.39%

FTSE 250 - Fallers

IG Group Holdings (IGG) 548.00p -9.94%
Ted Baker (TED) 1,407.00p -9.23%
AA (AA.) 84.50p -7.00%
Kier Group (KIE) 419.00p -6.05%
Victrex plc (VCT) 2,386.00p -5.09%
Capita (CPI) 104.90p -4.42%
Ferrexpo (FXPO) 180.60p -4.39%
Mitchells & Butlers (MAB) 260.20p -3.99%
Galliford Try (GFRD) 672.50p -3.93%
Rank Group (RNK) 149.80p -3.85%