Sector movers: Drop in Gilt yields hits life insurers, gold-diggers higher

Interest rate sensitive REITs led fallers in the market place at the start of the week even as longer-term Gilts' prices advanced at the start of the quarter, pushing their yields sharply lower, with jitters surrounding Brexit a possible trigger.

Life insurers were also knocked lower as the yield on the benchmark 10-year Gilt dropped seven basis points to 1.07%, its lowest level since October, alongside similar-sized falls in US Treasury yields.

Household goods and home construction stocks were also down; that followed survey data from Halifax on Friday which revealed that house prices in Britain fell by 0.3% on the month, pushing the annualised rate of price gains from 4.5% in February to 3.5% for March.

As well, the government's Help to Buy scheme fell under the media spitlight at the weekend and not for the best reasons, amid talk that it as being used by some who did not appear to need it or to make it easier to buy bigger homes.

"That the system was being used to propel buyers into larger houses or that house builders were building more expensive houses because more buyers had more buying power has been an open secret for some time but after the build quality issues that have been widely publicised since the start of the year, the media have started to take a closer look at how the new homes industry operates," analysts at ShoreCap explained in a research note.

Out among retailers, it was shares in Next that were pacing losses on the Footsie as analysts at Exane BNP Paribas downgraded the stock from 'Neutral' to 'Underperform'.

Going the other way, Randgold Resources was on the frontfoot as Numis singled it and fellow gold-digger Acacia Mining out as its preferred miners in the FTSE and FTSE 250, respectively.

"Whilst we expect gold to face some headwinds during the second quarter due to a combination of weaker seasonal demand and further Fed rate hikes we expect heightened inflation expectations and stronger physical demand in H2 to be supportive for metal prices," the broker said.

Spirax Sarco also found a bid as the same broker upped its recommendation on the shares from 'Hold' to 'Add' as the firm announced its largest M&A transaction ever, picking up German boiler controls outfit Gestra for £160.0m.

Numis said Gestra had long been seen as a strong competitor in Germany, adding that the portfolio was also complimentary and would benefit Spirax's scale and reach.

Top performing sectors so far today
Industrial Metals & Mining 2,432.24 +3.20%
Forestry & Paper 21,154.95 +1.92%
Automobiles & Parts 8,573.69 +0.94%
Industrial Engineering 11,270.18 +0.91%
Mining 15,673.99 +0.72%

Bottom performing sectors so far today
Real Estate Investment Trusts 2,886.04 -1.11%
Real Estate Investment & Services 2,576.62 -1.01%
General Retailers 2,492.70 -0.92%
Life Insurance 8,062.94 -0.90%
Household Goods & Home Construction 17,549.01 -0.49%