Sector movers: Big tobacco holds firm as negative sentiment drags most sectors down

Negative sentiment took hold in London on Tuesday, with miners leading the sell-off as the Greek debt crisis weighed on investors’ mind.

At 1515 BST, the blue chip FTSE 100 index was down 0.36% or 10.51 points at 6700.01 as miners led trading lower.

Base metals continued in the red on the London Metals Exchange with three-month contracts of lead (down 15.5%) and tin (down 36.8%) taking a hammering over tepid Chinese demand at midway point of trading. Zinc (broadly flat), aluminium (down 5.9%), copper (down 2.97%) and nickel (0.97%) were also in the red.

With uncertainty persisting on the precious metals front, miners invariably bore the brunt. Kaz Minerals (down 4.88%), Antofagasta (down 3.02%), Randgold Resources (down 2.33%) and Anglo American (down 2.25%) were among the trading session’s biggest fallers.

The rest of the sector did not fare any better, with leading names such as Vedanta (down 2.13%), Lonmin (down 2.11%), Rio Tinto (down 2.07%) and Glencore (down 1.83%) trading lower.

Petra Diamonds, whose core business is far removed from the metals market melee, was among the few stocks in the mining sector to buck the trend. The diamond explorer was trading up 0.39% or 65p at 156p. Nonetheless, the headline sector index was trading down 1.74% or 235.26 points at 13,222.19.

Oilfield services companies and oil and gas producers were also trading lower on largely bearish sentiments in the oil markets, with blue chips BP (down 1.03%) and Shell (‘a’ shares down 0.86% / ‘b’ shares down 0.66%) leading the sell-off with a plethora of mid to small cap oil and gas exploration and production companies in the red.

With the market spooked by Greece, many sectors traded lower but big tobacco avoided the drop, as investors flocked to the safety of high-yield stocks. At the time of writing, the tobacco sector was leading the London market up 2.40% or 994.20 points at 42,350.88 with both blue chips trading higher.

British American tobacco led the way, up 2.70% or 92p at 3,503.50p, while rival Imperial Tobacco was up 1.76% or 56p at 3,231p. The entrenched positivity was boosted further when Credit Suisse reinstated coverage on both stocks at ‘outperform’.

Analysts at the investment bank applauded BAT’s “consistent track record” and showed optimism about Imperial’s recent purchase of Reynolds assets. Finally, housing, property and REITs rebounded from Monday’s lows.

Top five sector fallers

Mining 13,321.61 -235.84 -1.74%
Fixed Line Telecommunications 5,095.16 -65.82 -1.28%
Technology Hardware & Equipment 1,305.03 -15.43 -1.17%
Oil Equipment, Services & Distribution 18,308.84 -174.02 -0.94%
Banks 4,499.55 -36.21 -0.80%