Sector movers: Rolls-Royce lifts defence stocks after MoD contract

By Benjamin Chiou

Date: Monday 18 Jun 2012

A bumper contract for Rolls-Royce has boosted the stock today, meaning that the aerospace and defence sector was one of the best performers in afternoon trade.

The global power systems group announced on Monday that it has bagged a massive contract with the Ministry of Defence worth over £1bn to supply reactor cores for the UK's nuclear-powered submarine fleet.

The news had pushed shares up 2.49% to 842.5p before the close. Sector peers BAE Systems, Meggitt and Cobham were also making gains.

Heading the other way were the banks on the back of risk aversion as the Eurozone crisis continues to cloud the global economic outlook. RBS, Lloyds and Barclays were among the worst performers this afternoon.

Nomura maintained its 'neutral' view of the UK banking sector this morning, saying that while the initial reaction to last week's new stimulus measures (to reduce the cost of funding) was positive, "we see it more as a trading/short term rally, and a continuation of the volatile price reaction we have seen over the past year."

The broker said it prefers Standard Chartered and HSBC due to their emerging markets exposure.


Top performing sectors so far today
Personal Goods 20,863.33 +2.96%
Aerospace and Defence 3,635.74 +1.65%
Electronic & Electrical Equipment 3,070.65 +1.44%
Tobacco 35,826.39 +1.12%
Industrial Metals & Mining 2,928.00 +0.99%

Bottom performing sectors so far today
Industrial Transportation 2,394.76 -3.59%
Real Estate Investment & Services 1,603.20 -1.53%
Banks 3,621.90 -1.20%
Construction & Materials 3,196.45 -1.02%
Insurance (non-life) 1,426.63 -0.59%

BC

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