Sector movers: Transport sinks, tobacco lit up by Juul probe
The industrial transportation and support services sectors were rumbling lower on Tuesday, with oil and tobacco providing the heat at the top.
Industrial Transportation was led lower by Royal Mail and James Fisher & Sons.
Royal Mail was down for the second day after a shock profit warning the previous afternoon, slashing its full year profit guidance on the back of lower letter volumes, a dip in parcel profits and slower progress with cost cutting since resolving industrial action earlier in the year.
After productivity improved just 0.1% in the first half of the year, analysts at RBC Capital Markets were among the many frowning at the numbers on Tuesday, saying over 2019-2020 labour productivity needs to rise around 8%-9% cumulative over the next two years. "RMG will now need to run even harder to stand still... Therefore to get back on track, without stamp price increases higher than anticipated, the company will need to work even harder. To us, this is ambitious and we see a high risk that the impact of the present miss becomes hard to claw back from."
James Fisher was down despite a 15-point climb in the Baltic Dry Index, reaching 1570 points.
Among the large and diverse support services sector, plumbing products distributor Ferguson was washed down the u-bend by some investors who got the hump after the group failed to include a share buyback alongside its final results. Results were pretty strong though, with a promise to 're-base' its dividend upwards 10% and the final payout upped 21% as trading profits hit forecast levels. One downside was that the outlook revealed that the new financial year since 1 August has started well, but that September was a bit slower than August.
Equiniti slipped as director Ric Williams, CEO of the EQ Paymaster division, sold 15,350 shares.
Other sector fallers included AA, Ashtead, IWG and SIG.
Tobacco giants British American Tobacco and Imperial Brands were boosted as the US regulators made a surprise raid on e-cigarette maker Juul's headquarters.
The Food and Drug Administration said on Tuesday that it had seized "thousands of pages of documents" as part of its investigation into the company's marketing practices.
Juul has a huge 73% of the US e-cigarette market and has been at the centre attention of FDA probe into the growing "epidemic" of vaping among teens this year.
Oil giants BP and Shell were on the front foot as Brent crude hovered around $85 a barrel, with
Top performing sectors so far today
Industrial Metals & Mining 5,261.57 +1.93%
Tobacco 40,190.48 +1.54%
Oil Equipment, Services & Distribution 16,172.56 +1.43%
Mining 17,882.27 +1.41%
Electricity 7,009.93 +1.36%
Bottom performing sectors so far today
Industrial Transportation 2,882.15 -3.83%
Support Services 8,335.23 -2.07%
Automobiles & Parts 10,021.04 -1.67%
Life Insurance 8,126.04 -1.57%
Chemicals 16,271.67 -1.54%