Sector movers: Retailers, homebuilders pace gains

A better than expected showing from retailers during the month of September, especially in the food segment, sent the sector higher.

Figures from the British Retail Consortium revealed a 0.4% year-on-year increase in the value of like-for-like sales for the sector, which was comfortably ahead of the consensus forecast for a gain of 0.3%.

Specific stocks such as N Brown were further boosted by company-specific news.

Profits fell 20% during the first half of the year at the specialist-fit clothing retailer, but that too was ahead of consensus forecasts and followed a recovery in sales in the second quarter.

Nonetheless, management did say it had adopted a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".

Another outperformer within the retail space was Sports Direct, which bounced back from a profit warning issued on 7 October related to the drop in value of the pound versus the US dollar.

That was despite analysts at Goldman Sachs cutting its target price for the stock from 275p to 250p and reiterating its recommendation to 'sell'.

Undeterred by the BRC data, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, told clients: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars.

"Indeed, sterling’s further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."

Home construction stocks were also on the up after testimony from the Monetary Policy Committee's newest member, Michael Saunders, helped to break the recent losing streak in Gilts.

In testimony to the Treasury Select Committee, Saunders indicated that the Bank of England did not need to realign its monetary policy stance in light of the recent sharp drop in Sterling.

Going the other way, miners slipped as commodity prices fell afoul of the strengthening US dollar, with precious metals miners such as Hochschild Mining, Centamin or Acacia Mining bearing the brunt of selling.

A retreat in crude oil futures after the IEA suggested in its latest Oil Market Report that Saudi Arabia may need to cut its own output more in order for an OPEC deal to cap production to work accounted for the losses in Big Oil.

Top performing sectors so far today
General Retailers 2,557.83 +1.78%
Household Goods & Home Construction 16,514.91 +1.72%
Chemicals 13,033.64 +1.10%
Industrial Metals & Mining 2,058.38 +1.01%
Travel & Leisure 8,505.16 +1.01%

Bottom performing sectors so far today
Mining 13,123.04 -2.06%
Technology Hardware & Equipment 2,097.36 -1.93%
Forestry & Paper 17,988.17 -1.30%
Life Insurance 7,157.72 -1.13%
Oil & Gas Producers 8,014.51 -0.99%