Sector movers: Life insurers, financials gain as Fed rate hike odds improve

Better than expected US manufacturing survey data helped nudge market-pricing for a December interest rate hike in the States come December higher, in turn benefitting shares of life insurers and financial services firms.

IHS Markit's manufacturing sector purchasing managers' index improved from a reading of 53.2 in October from a three-month low of 51.5 for September, surpassing economists' estimates for an unchanged reading.

A level above 50 signals an expansion while a reading below that indicates a contraction.

Commenting on the figures, Chris Williamson, chief business economist at IHS Markit, said: “Both output and new orders are rising at the fastest rates for a year amid increasingly widespread optimism that demand will pick up again after the presidential election, which has been commonly cited as a key factor that has subdued spending and investment in recent months.”

Those data saw Fed funds futures rise to price-in a 74.5% probability of a 25 basis point rate hike by the Fed when it next meets on 14 December.

To take note of, speaking earlier in the session the president of the Federal Reserve bank of St.Louis, James Bullard, reiterated a previous call for one more interest rate hike in the States.

Defensives were on the backfoot, with Utilities and Electricity both lower, with Cobham accounting for weakness in Aerospace and Defence.

Pharmaceuticals could be seen slipping lower again as markets continued to discount increasing odds of a Clinton victory in the upcoming US elections.

Top performing sectors so far today
Life Insurance 7,057.54 +0.93%
Financial Services 9,429.87 +0.55%
Construction & Materials 6,553.22 +0.54%
Industrial Transportation 3,039.65 +0.12%
Equity Investment Instruments 8,417.48 +0.09%

Bottom performing sectors so far today
Gas, Water & Multiutilities 6,344.39 -1.60%
Pharmaceuticals & Biotechnology 14,352.58 -1.49%
Forestry & Paper 17,331.12 -1.41%
Aerospace and Defence 4,503.61 -1.30%
Electricity 9,251.38 -1.26%