Sector movers: Tobacco a drag, retailers step higher

Tobacco and utilities heavyweights exerted a big drag on Monday, while retailers were on the front foot.

Cigarette makers had burnt fingers after analysts at US investment bank Cowen said they were "increasingly cautious" about industry volumes, particularly in the US, such that the decline of 4.5% seen last year is expected to more than double to around 10% by 2025 due to the switch to vapour.

With menthol cigarettes also potentially facing a US ban, British American Tobacco is "arguably the most disadvantaged" by the changing US landscape, while Imperial Brands still remains "a good cost cutting story". But suffers from market share softness in the US and internationally as well as increased regulatory risk. Both were all downgraded to 'market perform' from 'outperform'.

The gas, water and multi-utilities sector was also hit by a change of broker opinion on Monday, with British Gas owner Centrica downgraded to 'hold' from 'buy' by Jefferies. Analysts sees "material downside risk" to Centrica's 2019-20 earnings, "borderline" credit metrics and "limited" market-to-market benefits of higher commodity prices in the medium-term.

Elsewhere all members of the sector were under water, with Severn Trent down 1.8%, Pennon down 1.1% and United Utilities down 1%. In the electricity sector, SSE was down 1.7%, but Drax and ContourGlobal were in positive territory, the latter after finally signing a deal to acquire a combined heat-and-power portfolio in Mexico from Alpek for $724m.

Retailers were mostly seen in the green, with both general and food retailers on the up ahead of scheduled trading updates from most of the sector in the coming few weeks.

This week, Morrisons statement is due on Tuesday, with Sainsbury's and Ted Baker expected on Wednesday, followed by B&M, Card Factory, Debenhams, DFS, Marks & Spencer, Mothercare and Tesco on Thursday. The week is expected to wrap up with AO World, Game Digital and Foot Asylum.

Marks & Spencer and Sainsbury led the FTSE 100 charge, followed by Next and Kingfisher.

Dunelm Group, the FTSE 250 homewares specialist, was one of the main catalysts, as it said that it expected full-year profits to be at the top range of analysts’ current forecasts.

On the supermarkets side, Aldi reported almost £1bn in sales for December, which the German discounter put down to demand for its premium lines, while also having opened 65 new shops in 2018 to take it to total of 827.

Top performing sectors so far today

Leisure Goods 7,981.36 +3.23%

General Retailers 1,975.82 +2.32%

Food & Drug Retailers 3,437.57 +1.69%

Software & Computer Services 1,740.72 +1.50%

Electronic & Electrical Equipment 6,279.42 +1.45%

Bottom performing sectors so far today

Tobacco 29,591.32 -4.54%

Forestry & Paper 18,777.51 -1.71%

Gas, Water & Multiutilities 4,643.35 -1.61%

Aerospace and Defence 4,344.60 -1.45%

Electricity 6,447.78 -1.43%

Market Movers

FTSE 100 (UKX) 6,807.03 -0.44%
FTSE 250 (MCX) 17,948.54 0.86%
techMARK (TASX) 3,344.93 0.49%

FTSE 100 - Risers

NMC Health (NMC) 2,794.00p 6.64%
Fresnillo (FRES) 916.00p 4.66%
Marks & Spencer Group (MKS) 261.00p 3.12%
Sainsbury (J) (SBRY) 267.60p 2.92%
Antofagasta (ANTO) 805.80p 2.57%
Ashtead Group (AHT) 1,745.50p 2.56%
Carnival (CCL) 3,904.00p 2.52%
Next (NXT) 4,588.00p 2.46%
Paddy Power Betfair (PPB) 6,750.00p 2.35%
Kingfisher (KGF) 220.30p 2.27%

FTSE 100 - Fallers

Imperial Brands (IMB) 2,332.00p -4.91%
Centrica (CNA) 131.20p -4.44%
British American Tobacco (BATS) 2,477.53p -4.08%
Smurfit Kappa Group (SKG) 2,132.00p -2.83%
HSBC Holdings (HSBA) 641.10p -2.35%
Standard Chartered (STAN) 594.70p -2.16%
Rolls-Royce Holdings (RR.) 808.60p -2.08%
CRH (CRH) 2,119.00p -1.85%
BAE Systems (BA.) 464.60p -1.78%
InterContinental Hotels Group (IHG) 4,138.00p -1.76%

FTSE 250 - Risers

Dunelm Group (DNLM) 647.00p 11.84%
Aveva Group (AVV) 2,450.00p 5.60%
Clarkson (CKN) 2,250.00p 5.39%
Merlin Entertainments (MERL) 340.30p 5.32%
Vesuvius (VSVS) 519.50p 5.12%
Softcat (SCT) 603.00p 4.33%
Sports Direct International (SPD) 259.80p 4.17%
TP ICAP (TCAP) 320.40p 4.13%
McCarthy & Stone (MCS) 138.51p 4.06%
Vivo Energy (VVO) 133.14p 4.02%

FTSE 250 - Fallers

Indivior (INDV) 120.95p -4.54%
CYBG (CYBG) 185.50p -2.37%
Equiniti Group (EQN) 201.50p -2.18%
Just Group (JUST) 94.95p -2.01%
Centamin (DI) (CEY) 120.00p -2.00%
Hastings Group Holdings (HSTG) 193.60p -1.78%
Edinburgh Dragon Trust (EFM) 359.02p -1.64%
TBC Bank Group (TBCG) 1,464.00p -1.61%
Quilter (QLT) 118.76p -1.54%
Britvic (BVIC) 814.00p -1.45%