|CATEGORY: SECTOR REVIEW
Mon 13 Nov 2017
LONDON (SHARECAST) - (ShareCast News) - Ultra Electronics led a retreat in aerospace and defence and cyclicals more broadly at the start of the week.
Shares in the electronics outfit cratered after the company lowered its guidance for full-year 2017 organic growth to -4% and said its chief would be leaving the firm, with £20m of order delays and cancellations mainly to blame on the back of budgetary pressures in the UK.
Compounding matters, no guidance was provided for 2018, leaving analysts to 'fill-in the blanks'.
Right behind were General Retailers, where Dignity sustained the biggest share price losses in the wake of a third quarter update, followed by the likes of JD Sports and Kingfisher.
Other cyclicals moving lower included Evraz and GKN which accounted for weakness in their respective sector gauges.
Weaker-than-expected Chinese money supply data out overnight likely weighed on both.
In the background, strategists at JP Morgan reiterated their downgrade of cyclicals from the prior week, from 'overweight' to 'neutral'.
However, JP Morgan stressed that the US interest rate yield curve had yet to 'invert' - which might signal an impending recession. For now, it was simply 'flattening' which was "nothing unusual" as the US central bank tightened policy.
Top performing sectors so far today
Personal Goods 37,032.31 +0.54%
Oil & Gas Producers 8,836.73 +0.47%
Beverages 20,674.07 +0.39%
Food Producers & Processors 8,570.51 +0.27%
Mining 17,566.68 +0.22%
Bottom performing sectors so far today
Aerospace and Defence 4,845.71 -3.33%
General Retailers 2,446.54 -1.89%
Automobiles & Parts 7,341.53 -1.87%
Industrial Metals & Mining 3,243.96 -1.51%
Electricity 7,864.59 -1.45%