Sector movers: Tobacco, financial stocks tumble as market retreats from election highs

Most sectors were in the red as the London market pulled back from post-election highs on Tuesday with the FTSE 100 back below the 7,000 mark.

At 15:51 BST, the blue chip index was trading down 103.87 points or 1.48% at 6925.98, with the bounce received from the election of a Conservative majority government on Friday a distant memory.

Tobacco and life insurance stocks led the sell-off as blue chips British American Tobacco (down 1.77%) and Imperial Tobacco (1.96%) saw declines on profit taking. Almost all stocks in the life insurance segment were in the red with Old Mutual (down 2.75%), Aviva (down 2.22%), Prudential (down 2.18%), Legal & General (down 1.94%) and Standard Life (down 1.03%) among the biggest fallers.

Additionally, Hiscox (down 1.04%) declined after underwhelming with gross premiums growth of 12% to £561.7m in the first quarter.

Financial stocks tailed the insurance sector into red territory with Aberdeen Investment Management (down 3.58%), Hargreaves Lansdown (down 3.32%), Man Group (down 3.67%) and Investec (down 2.79%), Close Brothers Group (down 2.03%) and Brewin Dolphin (down 1.94%) among the biggest fallers with a host of banking sector stocks not far behind.

HSBC (down 1.92%), Standard Chartered (down 1.77%), Barclays (down 1.32%) and Virgin Money (down 1.16%) were all in the red. Negative sentiment was particularly pronounced in the case of HSBC and Standard Chartered after both banks were downgraded by Macquarie.

HSBC was downgraded to underperform, with the target price lowered to 520p from 600p. Standard Chartered was also downgraded to underperform with a lower target price of 850p down from 950p.

However, state-backed lender Lloyds Banking Group shrugged off wider negativity after the UK Treasury divested a further 1% stake in the firm, reducing its holding to less than 20%. After trading in the red early on in the session, the stock recovered by 0.58% trading at 87.12p.

On a day of few positives, oil and gas related stocks traded largely in the green bucking wider bearish trends on the London market. Lamprell (up 4.66%), Hunting (up 3.65%) and Tullow Oil (up 2.43%) and were among the sector’s notable risers. Amec (up 0.75%) and Petrofac (0.18%) also posted marginal gains.

Worst five sectors

Tobacco 42,395.67 -1,022.76 -2.36%
Life Insurance 8,246.88 -195.74 -2.32%
Financial Services 9,675.81 -221.27 -2.24%
Pharmaceuticals & Biotechnology 13,191.50 -295.13 -2.19%
Beverages 14,059.96 -292.66 -2.04%