Sector movers: Political uncertainty boosts defensives

Defensives outperformed at the start of the week as a wave of risk aversion linked to heightened political worries broke over global equity markets.

That followed a rally by French president hopeful Marine Le Pen at the weekend in which she laid out her plans for a referendum on the country's continued membership of the EU, an exit from the euro, 'smart' protectionist measures and a cap on immigration.

On a more promising note, the most recent polls appeared to show that centrist Emanuelle Macron would likely come out on top in the 7 May second round vote in France.

Nevertheless, the news was akin to pouring oil on the fire of political uncertainty already lit by what some analysts described as the new US administration's "erratic" policies.

As such, shares of Indivior saw follow-through buying on the coattails of supportive comments from analysts at Numis and Deutsche Bank during the previous session.

"We see several material catalysts for the shares over the next 12 months: beginning with likely upgrades to consensus sales expectations for FY17 at the Final results on 22 February; further positive Phase 3 data on the next-generation monthly depot formulation (RBP-6000) by the end of Q1 followed by filing for approval with the FDA in Q2. A final opinion on the patent litigation against Dr Reddy’s trial should also come in Q2," analysts at Numis said in a research note dated 2 February.

AstraZenenca also found a bid, with analysts at Deutsche Bank lifting their target price on the pharma group's shares from 5,500p to 6,000p and reiterating their recommendation to 'Buy'.

"Guidance implies a lower base for underlying margins than we had assumed. Although we see a greater risk that material EPS growth is delayed into 2019 and view AZN as more dependent on pipeline delivery, we continue to see positive risk-reward ahead of a major flow of pipeline catalysts through 2017," the German investment bank said.

Heading in the other direction, construction stocks were down on reports that the government was to reveal a major shift in housing policy in a white paper this week.

Food retailers also lost ground on concerns that the British Retail Consortium's latest sales monitor, scheduled for release at midnight, was likely to show muted sales growth in January.

"A soft January BRC survey would fan suspicion that consumers may be starting to rein in their spending as rising inflation increasingly squeezes purchasing power.

"This suspicion has also been fanned by the Bank of England reporting that consumers borrowed at a much reduced rate in December," said Dr. Howard Archer, chief UK and European economist at IHS Global Insight.