FTSE 100 movers: Defensives lead, alongside Big Oil

M&G

192.55p

17:00 10/01/25

-0.18%

-0.35p

Defensives lent their weight to Monday's move to the upside, even as investor sentiment was buoyed by Wall Street's ability seeming ability to avoid its now customary stumble at the start of the week.

Aerospace and Defence

11,800.41

16:59 10/01/25

-0.04%

-4.77

Financial Services

18,038.56

16:59 10/01/25

-1.61%

-294.43

FTSE 100

8,248.49

17:14 10/01/25

n/a

FTSE 350

4,521.32

16:59 10/01/25

n/a

FTSE All-Share

4,476.42

17:15 10/01/25

n/a

Meggitt

798.80p

16:52 12/09/22

0.00%

0.00p

Rolls-Royce Holdings

580.00p

17:14 10/01/25

-0.24%

-1.40p

Reflecting the above, strategists at several of the biggest sell-side investment banks on the Street remained wary, including JP Morgan.

Strategists at JP Morgan believed the worst for risk assets, might now be past, but told clients that in the case of stocks, risks remained skewed to the downside.

"[...] Does this mean that we have seen the low for the year? This will largely depend on whether we see a reacceleration in contagion in China, now that the country has started to normalize," JP Morgan said.

"Also, for the rally to hold, the negative spiral between the weakening labour market, depressed final demand and falling earnings should not become entrenched. Finally, in the last two recessions, forward earnings were cut by 40% and 20%, respectively, ahead of the low, vs current 3%."

Nonetheless, while Utilities, drug maker and consumer staple giants were all moving higher, so too were big oil names such as BP or Shell and select financials including London Stock Exchange Group.

Gains in the oil patch were remarkable given the roughly 12% downdraft in front-dated Brent futures.

Going the other way, Rolls Royce was hit by negative news coverage at the weekend regarding its cash flow position, given how civil aerospace accounts for roughly half its annual sales.

Analysts at JP Morgan were in a similar frame of mind, saying they believed an equity raise was needed and that it expected Standard&Poor's to cut its rating for the firm's long-term bonds to below investment grade.

The broker also cut its earnings per share estimates for other European civil aerospace names over 2020-22 for the third time since 14 March, although in the case of Meggitt it raised its target price from 305.0p to 330.0p.

M&G was another top faller after the Financial Times reported that investors had yanked approximately £2.5bn from its Optimal Income fund after enduring roughly 15% losses between 19 February and 25 March.

Travel stocks including Carnival, easyJet and IAG were also lower, with news of more extended lockdowns across various countries dampening the mood.

Market Movers

FTSE 100 (UKX) 5,563.74 0.97%

FTSE 100 - Risers

Pearson (PSON) 560.80p 8.10%
Rentokil Initial (RTO) 386.00p 6.66%
Polymetal International (POLY) 1,376.50p 5.93%
BP (BP.) 323.60p 5.92%
Scottish Mortgage Inv Trust (SMT) 563.00p 5.63%
United Utilities Group (UU.) 947.40p 5.50%
London Stock Exchange Group (LSE) 7,322.00p 5.38%
Auto Trader Group (AUTO) 443.30p 4.31%
Rio Tinto (RIO) 3,674.00p 4.14%
Pennon Group (PNN) 1,116.50p 4.10%