Sector movers: GKN drops on military spending concerns

24th Jan 2012 15:44

The automobiles and parts sector was the worst performer of the day, with sector giant GKN providing a drag in afternoon trading.GKN, the industrial engineering giant, was trading down 3.5% on Tuesday, with reports connecting the fall to the plunge in Chemring's share price, the FTSE 250 military equipment maker. Along with Chemring's full-year results that missed forecasts, the firm's Chairman gave a gloomy outlook on the defense market in 2012, saying that he expects things "not to be any easier this year".GKN, for its part, has a large exposure to the defense industry, with its large Aerospace division manufacturing parts and equipment for helicopters and fighter jets. Aerospace accounted for £1.8bn of GKN's £4.5bn in total sales in the first nine months of 2011 with the division recording a 4% increase year-on-year.The firm had already warned at the half-year stage of a fall in US military aircraft demand as a result of the rundown of the F-22 fighter jet and the decrease on the C-17 military transporter programmes; it seems like Chemring's outlook has reminded investors of these issue again today.Meanwhile, Chemring was weighing on the aerospace and defence sector today, the fifth-worst performing category of the day.Heading the other way was the gas, water and multi-utilities sector which was in demand today as risk appetite was scaled back amid the ongoing troubles in the Eurozone.Global markets were on the decline today after the European finance ministers' decision to reject the offer made by Greece's private sector creditors on the coupon rate to be assigned to the country's new debt. Defensives were on the way up in afternoon trade, with utilities firms International Power, National Grid and SSE among the highest risers. BCTop performing sectors so far todayGas, Water & Multiutilities 4,594.40 +1.31%Electricity 7,898.13 +0.96%Beverages 10,623.68 +0.68%Tobacco 33,699.14 +0.29%Fixed Line Telecommunications 2,356.94 +0.08%Bottom performing sectors so far todayAutomobiles & Parts 4,811.74 -4.01%Construction & Materials 3,545.07 -2.37%Electronic & Electrical Equipment 2,907.54 -2.33%Chemicals 7,247.58 -2.20%Aerospace and Defence 3,472.32 -2.15%