Sector movers: Defensives lead as stocks extend gains

(Sharecast News) - Stocks continued to push higher at the start of the week but market leadership centred on defensive issues ahead of a week full of economic events. Key among those would be the Chancellor Autumn Statement, on Thursday, which some analysts in the City said would underscore the grim economic outlook.

Investors were also waiting on the September employment report, on Tuesday, which would be followed by a reading on consumer prices in October, on Wednesday, and retail sales data covering the same month on Friday.

On that note, IG chief market analyst, Chris Beauchamp, told clients: "Sterling-watchers have their work cut out for them this week.

"Normally unemployment data, inflation figures and retail sales would be enough to keep track of, but the fiscal statement this week adds spice to the pound's outlook. Barring some remarkable surprises, this week is not likely to be overflowing with good news for the UK economy."

In the background, the pound was seeing some profit taking and as of 1632 GMT was 0.89% lower at 1.1725.

Aerospace and Defence issues were bouncing back alongside amid what appeared to be waning hopes for diplomatic contacts between Kyiv and Moscow in the near-term.

Nonetheless, speaking at the G-20 leaders' meeting in Bali Indonesia, US Secretary of State Janet Yellen said that if a peace agreement did materialise then an "adjustment" of sanctions on Russia was possible.

"There really hasn't been any effort on Russia's part to want to undertake negotiations with Ukraine on any terms that are acceptable to Ukraine," Yellen reportedly told the Wall Street Journal in an interview.

"I suppose in the context of some peace agreement, adjustment of sanctions is possible and could be appropriate."

As an aside, some strategists, such as Mislav Matejka at JP Morgan, were upbeat, pointing out to clients how a few weeks ago UK equities' average forward price-to-earnings multiple had fallen to 8.7.

That was less than the average P/E of 9.1 seen during the previous 5 recessions.

Furthermore, Matejka believed that P/E multiples did not need to go below that trough as inflation would indeed come off and follow growth lower.

Top performing sectors so far today

Tobacco 35,443.25 +2.57%

Aerospace and Defence 4,582.27 +2.39%

Personal Care, Drug and Grocery Stores 4,066.53 +2.38%

Pharmaceuticals & Biotechnology 20,129.22 +2.38%

Non-life Insurance 3,171.96 +1.81%

Bottom performing sectors so far today

Automobiles & Parts 1,470.93 -6.26%

Investment Banking and Brokerage Services 12,757.08 -2.01%

Real Estate Investment Trusts 2,376.89 -1.51%

Household Goods & Home Construction 10,328.86 -1.00%

Industrial Support Services 10,240.87 -0.84%