Sector review
Sector review from ShareCast
Sector movers: Investors seek out high dividend names
(Sharecast News) - Utilities paced gains on the FTSE 350 on Thursday as investors added to their positions in interest rate sensitive names in a bid to lock in current dividend yields.
Non-farm payrolls data due out the next day in the States were expected to determine whether the US central bank went ahead with a 25 basis point interest rate cut on 18 September or opted for a 50bp reduction instead.
Nevertheless, as economists at Oxford Economics pointed out there was no room for complacency at the Fed.
They were only anticipating a 25bp cut in two weeks' time and only two cuts before the end of the year, but conceded that a third reduction was possible.
For his part, IG chief market analyst Chris Beauchamp told clients: "The prospect of more rate cuts continues to put new life into the utility sector. Today's UK leaderboard is populated by a number of the high dividend-paying names, as investors look to bolster their income streams.
"It's a helpful recession defence too, given the strong visibility of revenues in the sector."
Brent crude oil futures traded a tad lower alongside.
That was despite Reuters citing two sources according to whom OPEC+ members were near to reaching an agreement to postpone planned output increases.
In parallel, cable added 0.29% to 1.3185, while the yield on the 10-year Gilt was off by three basis points at 3.919%.
Top performing sectors so far today
Electricity 11,954.44 +2.68%
Household Goods & Home Construction 14,701.54 +2.59%
Automobiles & Parts 1,061.15 +1.87%
Gas, Water & Multiutilities 6,245.37 +1.82%
Telecommunications Service Providers 2,157.09 +1.52%
Bottom performing sectors so far today
Food Producers 7,875.62 -4.66%
Pharmaceuticals & Biotechnology 23,707.51 -2.86%
Electronic & Electrical Equipment 9,827.57 -1.79%
Non-life Insurance 3,868.51 -1.43%
Industrial Engineering 12,058.78 -1.26%
Non-farm payrolls data due out the next day in the States were expected to determine whether the US central bank went ahead with a 25 basis point interest rate cut on 18 September or opted for a 50bp reduction instead.
Nevertheless, as economists at Oxford Economics pointed out there was no room for complacency at the Fed.
They were only anticipating a 25bp cut in two weeks' time and only two cuts before the end of the year, but conceded that a third reduction was possible.
For his part, IG chief market analyst Chris Beauchamp told clients: "The prospect of more rate cuts continues to put new life into the utility sector. Today's UK leaderboard is populated by a number of the high dividend-paying names, as investors look to bolster their income streams.
"It's a helpful recession defence too, given the strong visibility of revenues in the sector."
Brent crude oil futures traded a tad lower alongside.
That was despite Reuters citing two sources according to whom OPEC+ members were near to reaching an agreement to postpone planned output increases.
In parallel, cable added 0.29% to 1.3185, while the yield on the 10-year Gilt was off by three basis points at 3.919%.
Top performing sectors so far today
Electricity 11,954.44 +2.68%
Household Goods & Home Construction 14,701.54 +2.59%
Automobiles & Parts 1,061.15 +1.87%
Gas, Water & Multiutilities 6,245.37 +1.82%
Telecommunications Service Providers 2,157.09 +1.52%
Bottom performing sectors so far today
Food Producers 7,875.62 -4.66%
Pharmaceuticals & Biotechnology 23,707.51 -2.86%
Electronic & Electrical Equipment 9,827.57 -1.79%
Non-life Insurance 3,868.51 -1.43%
Industrial Engineering 12,058.78 -1.26%
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