Regency View:

UK Sector Snapshot

It’s been a brutal week for Banking with the sector being hit hard by a series of sobering trading updates. We took a short position in Lloyds yesterday, and whilst prices have bounced, we still expect the sector to continue to lag the market.

Oil & Gas was hit hard last week by Royal Dutch Shell’s disappointing earnings, and whilst the market is responding more positively this morning to BP’s numbers, this sector is likely to remain weak for some time.

In terms of clear strength, this has been hard to come by at the sector level due to the FTSE falling back to 5,900 support. Metals & Mining and Housebuilding & Construction have entered a choppy period of sideways consolidation but the latter is very stock-specific with Berkeley Group and Ferguson considerably outperforming the likes of Taylor Wimpey and Barratt Developments.

FTSE 100 Key Sector Snapshot