Investors in Financial Services got the short end of the stock on Friday, as shares in the London Stock Exchange Group were hit by a wave of selling after the stockmarket operator flagged its intention to increased spending on its integration with Refinitiv in 2021.
The owner of the UK’s premier trading venue forecast capital expenditures of £850m for the year ahead with £150m of associated operating costs.
To take note of nevertheless, despite Friday’s losses the shares had still roughly doubled in value over the preceding two years.
Travel stocks were also drag as investors took profits in the space amid news of rising numbers of Covid-19 infections on the Continent, including in Germany and Italy.
Going the other way, bank and oil stocks continued to find the most favour, with the former benefiting from rising government bond yields and the latter from the continued run higher in the price of Brent.
Typically, both sectors tend to do well during so-called ‘bear steepening’ phases in the bond market, which are characterised by rising interest rates and a decline in estimate for companies’ earnings per share.
On this ocassion however they rose alongside Technology Hardware and Equipment names.
Fixed Line Telecommunications meanwhile was boosted after Credit Suisse analysts told clients that BT Group would benefit from higher inflation, which would help pricing for its services, and rising bond yields, which help it reduce its pension deficit.
Top performing sectors so far today
Technology Hardware & Equipment 1,920.53 +6.56%
Fixed Line Telecommunications 1,692.86 +4.54%
Oil Equipment, Services & Distribution 5,759.21 +3.70%
Banks 2,855.71 +2.02%
Oil & Gas Producers 5,462.28 +1.65%
Bottom performing sectors so far today
Financial Services 11,870.58 -5.14%
Travel & Leisure 9,011.99 -3.46%
Aerospace and Defence 3,490.91 -3.45%
Equity Investment Instruments 12,162.57 -2.87%
General Industrials 6,517.13 -2.36%
