Sector movers: Investors catch their breath after sharp rotation towards cyclicals, ponder next move

Defensives and so-called 'bond proxies' took over from cyclicals such as aerospace and defence or industrial engineers following two days of gains for the latter after the unexpected election results Stateside.

That had left some cyclicals technically 'overbought' while "defensive, long duration bond proxies have suffered the most in the rally with Staples and Utilities in particular providing extreme readings of <-90 oversold," strategists at Bank of America-Merrill Lynch said in a research report sent to clients.

In the same report, BofA-ML trimmed its 'underweight' position on food and beverage producers.

There were also some company-specific drivers in the market, with HSBC having nudged its target on BT Group higher, from 460p to 470p.

The broker referenced the recent rise in market interest rates, albeit adding: "while the worst may be behind us, substantial pension [deficit] related upside appears unlikely given the importance of changes in real rates, which have been far less mobile than their normal equivalents".

REITS also did well, possibly on hopes of a softer than feared Brexit.

Aerospace and defence did poorly, as BAE Systems retreated on profit-taking, but following two days of enormous share price gains.

IMI acconted for weakness among engineers after SocGen downgraded the stock from a 'buy' to 'hold'.

Laird was again lower, with the stock changing hands just above their 52-week low of 130.30p hit two days prior.

Oil producers meanwhile tracked renwed losses in crude oil futures after OPEC said that production by its fourteen members had increased by 240,000 barrels a day in October, reaching an average of 33.64m b/d.

Top performing sectors so far today
Fixed Line Telecommunications 4,134.53 +3.54%
Tobacco 49,784.54 +1.20%
Food Producers & Processors 7,644.40 +1.16%
Gas, Water & Multiutilities 5,870.17 +0.99%
Real Estate Investment Trusts 2,730.89 +0.90%

Bottom performing sectors so far today
Technology Hardware & Equipment 887.96 -4.70%
Forestry & Paper 16,340.15 -4.65%
Oil & Gas Producers 7,325.14 -3.98%
Industrial Engineering 9,431.75 -3.61%
Aerospace and Defence 4,745.54 -3.17%