Sector movers: Healthcare in pain, telecoms and miners aglow

Healthcare equipment and services were a burden on Monday, while telecoms and miners were providing support.

Tripping 7% lower, the healthcare sector was looking on life-support but it was mainly because of the blood-letting at ConvaTec, where the woundcare and catheters group's chief executive fell on his sword alongside the issuing of a profit warning. The company blamed customer inventory management, namely destocking by a major customer of around $18-23m, and ongoing softness in the advanced woundcare market.

Convatec shares fell 33%, while sector peers NMC Health, Smith & Nephew, Spire Health and UDG Healthcare also fell as some investors thought it was best to be on the safe side.

The aerospace and defence sector was also under water, led by BAE Systems falling almost 4%, followed by tumbles for Meggitt, Senior and Cobham.

Market analyst Fiona Cincotta at City Index noted that Saudi contracts are "bread and butter" for the likes of BAE, and the prospect of sanctions being suggested by Washington.

Michael Hewson at CMC Markets added: "If concerns about rising trade tensions, slowing economic growth and difficult politics in Italy and the UK weren’t enough for markets to contend with, the prospect of sanctions on Saudi Arabia over the reported disappearance of journalist and US citizen Jamal Khashoggi is yet another ball for investors to juggle with as investors weigh up whether it is time to get back into the stock market in the aftermath of the recent sell-off."

The telecoms sector was dialing up further gains on the back of speculation about BT being split up, which was given fresh impetus over the weekend.

US activist investor Greenlight Capital has built a stake in BT and indicated its interest in the telecoms company splitting from Openreach, The Times reported on Saturday. Greenlight, which is run by David Einhorn, has bought a “medium-sized position” in BT and told its own investors last week that the rationale behind its investment was "it is possible" that BT's new management "will unlock value" by splitting off its Openreach infrastructure arm.

The mining sector was bathed in green, with the best performers being precious metals miners Randgold Resources and Fresnillo as gold prices hit their highest levels since July thanks to the rising levels of uncertainty elsewhere in markets.

Following meetings with more than twenty western and Chinese base metals producers, traders and investors over the course of London Metals Exchange conference, mining analysts at Deutsche Bank saw a defining theme being the "contrast between generally bearish leaning macro views - particularly expressed by Chinese market participants - and bullish micro fundamental views - particularly expressed by Western producers and trade houses with an emphasis on current physical market conditions".

Aluminium remains DB's favoured long trade heading into 2019. "Tightening trends in the refined copper market should support higher prices in Q4, albeit also beholden to macro developments. In our view, nickel stands out as the metal with the most bearish recent fundamental developments."

Top performing sectors so far today

Fixed Line Telecommunications 2,773.73 +2.13%
Mobile Telecommunications 3,419.84 +1.01%
Oil & Gas Producers 9,330.00 +1.00%
Pharmaceuticals & Biotechnology 13,857.43 +0.98%
Leisure Goods 8,106.07 +0.78%

Bottom performing sectors so far today

Health Care Equipment & Services 6,697.08 -6.78%
Aerospace and Defence 4,904.69 -2.02%
Industrial Engineering 11,354.58 -1.57%
Support Services 7,376.23 -1.44%
Food Producers & Processors 6,929.83 -1.35%