Sector movers: Utilities and oil producers lead decline
Utilities lost power on Tuesday, led by National Grid, while industrials were among the leading lights.
Energy regulator Ofgem said on Tuesday morning that it planned to cut the cost of capital for networks as part of a shake-up of the energy system.
Analysts said this was negative for investors who own shares in certain parts of the utility sector.
Energy network operator National Grid it was "disappointed with the proposed financial package, in particular the cost of equity range as we do not believe it appropriately reflects the level of risk borne by transmission networks".
National Grid, loved by many investors for its dividends, is "particularly affected" by the announcement, said Russ Mould at AJ Bell.
“The consensus analyst forecast is for National Grid to pay 48.9p per share in dividends for the financial year to March 2020, implying a 6.1% yield. One could expect dividends beyond 2021 to potentially be less generous should Ofgem’s proposals be finalised without any amendments," Mould added. “It shows that even the most defensive companies are still at risk from regulatory changes.”
Oil & gas producers were down as a whole, but while giants Shell and BP were in the red, mid-cap names were mixed, with Premier Oil down the furthest but Cairn Energy and Energean in positive territory.
Shell was in the hedalines as the FTSE 100 colossus was reported to be contemplating making bid for Endeavor Energy in the region of $8bn. Endeavor, which has drilling rights in the Permian basin, has fallen in value amid the oil price slump in recent weeks.
Crude prices were down again on Tuesday, with a barrel of Brent dropping 4% to around 14 month lows around $57.05 as it was reported that Russia is increasing output to 11.42m barrels per day this month, which would be a record for the country, if it turns out to be true.
"Major oil producers can talk about coordinated production cuts all they want, but at the end of the day they usually peruse their own interests," said David Madden at CMC Markets.
Despite the government ramping up its preparations for a no-deal Brexit, industrial stocks were among the strongest performers on Tuesday.
Top performing sectors so far today
Industrial Transportation +3.37%
Technology Hardware & Equipment +2.48%
Food & Drug Retailers +1.82%
Industrial Engineering +1.72%
General Retailers +1.44%
Bottom performing sectors so far today
Gas, Water & Multiutilities -4.57%
Automobiles & Parts -2.97%
Oil & Gas Producers -1.48%
Mobile Telecommunications -1.27%
Electricity -1.19%
Market Movers
FTSE 100 (UKX) 6,740.03 -0.49%
FTSE 250 (MCX) 17,558.06 0.81%
techMARK (TASX) 3,311.04 -0.23%
FTSE 100 - Risers
Royal Mail (RMG) 296.00p 3.90%
Taylor Wimpey (TW.) 134.95p 3.02%
Tesco (TSCO) 195.65p 2.84%
easyJet (EZJ) 1,079.50p 2.66%
Kingfisher (KGF) 220.80p 2.22%
Barratt Developments (BDEV) 443.60p 2.21%
Berkeley Group Holdings (The) (BKG) 3,391.00p 2.17%
Standard Life Aberdeen (SLA) 245.65p 1.97%
Johnson Matthey (JMAT) 2,740.00p 1.93%
Smiths Group (SMIN) 1,410.50p 1.91%
FTSE 100 - Fallers
National Grid (NG.) 778.10p -6.85%
NMC Health (NMC) 2,800.00p -3.78%
Shire Plc (SHP) 4,405.50p -2.80%
Micro Focus International (MCRO) 1,378.50p -2.10%
Wood Group (John) (WG.) 523.48p -1.97%
Antofagasta (ANTO) 781.40p -1.83%
Royal Dutch Shell 'B' (RDSB) 2,298.50p -1.73%
Royal Dutch Shell 'A' (RDSA) 2,282.00p -1.72%
Relx plc (REL) 1,611.00p -1.71%
Severn Trent (SVT) 1,840.00p -1.63%
FTSE 250 - Risers
Indivior (INDV) 105.10p 10.72%
Thomas Cook Group (TCG) 29.96p 9.99%
Vivo Energy (VVO) 123.50p 7.65%
IG Group Holdings (IGG) 569.50p 5.56%
Dunelm Group (DNLM) 509.50p 5.53%
IP Group (IPO) 107.92p 5.39%
BBA Aviation (BBA) 216.40p 4.54%
AA (AA.) 80.60p 4.51%
Redrow (RDW) 480.00p 4.17%
Inchcape (INCH) 541.00p 4.14%
FTSE 250 - Fallers
Softcat (SCT) 555.30p -4.26%
Provident Financial (PFG) 583.60p -2.93%
Premier Oil (PMO) 63.30p -2.62%
Daejan Holdings (DJAN) 5,660.00p -2.41%
Dixons Carphone (DC.) 131.80p -2.33%
Stagecoach Group (SGC) 139.50p -2.11%
Lancashire Holdings Limited (LRE) 596.50p -1.97%
TI Fluid Systems (TIFS) 161.80p -1.94%
Worldwide Healthcare Trust (WWH) 2,505.55p -1.94%
Domino's Pizza Group (DOM) 228.50p -1.93%