Sector movers: Utility stocks gain as investors welcome price cuts

Utility stocks were the best performers on London’s stock market on Tuesday, as moves by energy providers to cut costs were welcomed by investors.

SSE became the latest group to cut household gas bills on the back of the recent collapse in wholesale fuel costs. Shares were up nearly 2% in afternoon trade.

The Perth-based group said on Monday that it would lower domestic gas prices by 4.1% from 30 April, saving the average household around £28 a year.

“Only SSE customers can bank on the fact that their standard energy prices won’t increase under any circumstances before July 2016,” said Steve Forbes, SSE’s director of GB Domestic.

E.On, British Gas, Scottish Power and Npower, together with SSE, make up the ‘Big Six’ energy groups in the UK. E.On is the only provider which hasn’t yet announced price cuts.

Sector peer United Utilities gained 1% after accepting Ofwat’s price controls for its water division for the 2015-2020 period.

“This determination delivers value for all of our stakeholders, with a strong focus on customer benefits, including reduced bills in 2015/16, alongside continued high levels of investment which will provide further environmental benefits and a significant contribution to the regional economy,” the company said.

United Utilities also said it is targeting a dividend expansion at least in line with retail price inflation through to 2020, matching a promise made by SSE to its own shareholders.

Meanwhile, Centrica was up nearly 4% after analysts at Credit Suisse upgraded their rating on the stock from ‘neutral’ to ‘outperform’. They also lifted their target for shares of the British Gas operator from 290p to 310p.

Top performing sectors so far today
Electricity 9,148.04 +1.53%
Gas, Water & Multiutilities 6,312.15 +1.39%
Industrial Metals & Mining 1,710.72 +0.93%
Insurance (non-life) 2,054.28 +0.23%

Bottom performing sectors so far today
Automobiles & Parts 8,611.10 -2.54%
Construction & Materials 4,337.70 -2.40%
Industrial Engineering 8,785.07 -2.34%
Industrial Transportation 2,817.09 -2.27%
Technology Hardware & Equipment 1,220.17 -1.81%