Sector movers: Damaged packages, telecoms called up

Telecoms stocks were ringing up gains on Wednesday, while packaging companies were dented.

Telecoms stocks were up across Europe, with BT Group, Deutsche Telekom, Iliad and Telefonica all up sharply, with this being attributed to investor bargain hunting as the sector’s valuation to earnings wallowed around a four-year low

There was new speculation also driving BT to the top of the telecoms pile over the potential for a spin-off of its £12.6bn Openreach infrastructure arm. With current chief executive Gavin Patterson having battled so hard to keep hold of this arm, institutional shareholders apparently now want his replacement to examine getting rid of it, though in August BT said Openreach “is an important part of BT and there are no active plans to sell the business”.

Last week Morgan Stanley said in a note that Openreach "may have strategic appeal to a broad range of investors given that it essentially provides exposure to an income asset with long-term duration”.

The paper and packaging sector was down for the second day due to concerns about an oversupply of cardboard, which would hit prices after the US subsidiary of Hong Kong's Nine Dragons said it will invest $300m into its new mills in Wisconsin and Maine. Shares in packaging stocks DS Smith, Mondi and Smurfit Kappa were all under the cosh.

Goldman Sachs cut target prices across the sector after analysts said they had “underestimated the speed and severity” of containerboard supply coming on to the market and were concerned by the pace of recent new supply announcements "as well as the fact that Chinese entrants are now entering the US market for the first time".

"Over the past 15 months we have had 12 new capacity projects announced with another seven companies . . . exploring further new capacity additions... in aggregate they are likely to result in oversupply at some point in the 2020-2022 time period even if demand growth remains at recent circa 2% rates.”

Top performing sectors so far today

Fixed Line Telecommunications 2,749.63 +4.05%
Gas, Water & Multiutilities 4,851.82 +2.16%
Mobile Telecommunications 3,442.06 +1.62%
Tobacco 39,404.39 +1.36%
General Retailers 2,276.12 +1.02%

Bottom performing sectors so far today

Automobiles & Parts 8,096.09 -6.88%
Forestry & Paper 20,415.47 -6.78%
Leisure Goods 8,355.48 -5.77%
Electronic & Electrical Equipment 6,075.29 -4.58%
General Industrials 5,989.16 -4.35%

Market Movers

FTSE 100 (UKX) 7,216.93 -0.29%
FTSE 250 (MCX) 19,474.60 -0.38%
techMARK (TASX) 3,350.25 -0.03%

FTSE 100 - Risers

BT Group (BT.A) 238.95p 4.48%
Kingfisher (KGF) 261.30p 3.73%
Sage Group (SGE) 564.00p 3.18%
United Utilities Group (UU.) 719.20p 3.10%
Barclays (BARC) 172.56p 2.86%
Lloyds Banking Group (LLOY) 58.89p 2.77%
National Grid (NG.) 803.30p 2.32%
Marks & Spencer Group (MKS) 293.91p 2.30%
Vodafone Group (VOD) 154.10p 2.24%
Royal Bank of Scotland Group (RBS) 250.90p 2.20%

FTSE 100 - Fallers

Smith (DS) (SMDS) 420.40p -5.99%
Burberry Group (BRBY) 1,767.50p -5.98%
Mondi (MNDI) 1,834.50p -5.71%
Smurfit Kappa Group (SKG) 2,602.00p -4.90%
Halma (HLMA) 1,297.00p -4.56%
Antofagasta (ANTO) 789.20p -4.36%
Rolls-Royce Holdings (RR.) 891.60p -4.11%
Croda International (CRDA) 4,674.00p -3.97%
Intertek Group (ITRK) 4,410.00p -3.75%
Johnson Matthey (JMAT) 3,185.00p -3.48%

FTSE 250 - Risers

Dixons Carphone (DC.) 161.25p 5.05%
TP ICAP (TCAP) 281.70p 4.33%
Daejan Holdings (DJAN) 5,970.00p 4.01%
Card Factory (CARD) 193.10p 3.76%
Sophos Group (SOPH) 448.40p 3.65%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 109.50p 3.30%
CLS Holdings (CLI) 217.00p 3.09%
Vivo Energy (VVO) 123.94p 3.08%
Lancashire Holdings Limited (LRE) 545.50p 2.92%
Just Group (JUST) 80.75p 2.87%

FTSE 250 - Fallers

Contour Global (GLO) 163.00p -7.02%
Bodycote (BOY) 804.50p -5.58%
Vesuvius (VSVS) 590.00p -5.22%
Electrocomponents (ECM) 654.80p -4.30%
Victrex plc (VCT) 2,892.00p -4.24%
Synthomer (SYNT) 498.20p -3.82%
TI Fluid Systems (TIFS) 207.00p -3.72%
Wizz Air Holdings (WIZZ) 2,403.00p -3.69%
Games Workshop Group (GAW) 3,430.00p -3.52%
Kaz Minerals (KAZ) 497.00p -3.50%