Sector movers: Tesco drags retail sector lower

3rd Oct 2012 16:20

The food and drug retail sector was the worst performing sector on Wednesday afternoon after a disappointing set of results from Tesco offset a solid trading update from supermarket peer Sainsbury.After an earlier fall, Sainsbury was higher after saying it had outperformed the market in the second quarter, with total sales up 4.4% excluding fuel and like-for-like (LFL) sales up 1.9%.However, sector peer Tesco suffered losses after pre-tax profits (pre exceptionals and property profits) fell 15%, worse-than-expected according to Seymour Pierce, which labelled them as "disappointing" this morning.The global chain did see a return to LFL sales growth in the second quarter, although it has had to sacrifice margin to do so. Electricity stocks were topping the chart today with British Gas's parent Centrica gaining 1.6% after a broker upgrade.Citigroup raised its recommendation on the stock this morning to 'buy' and lifted its target price from 315p to 360p.Analyst Robert Coates said: "This current valuation in our opinion does not reflect the defensive profile of the stock or the potential upside from deploying the increasing free cash flow."We would also view any seasonal fourth quarter weakness as an opportunity to build positions ahead of possible positive 2013 news flow."Elsewhere in the sector, shares in Renewable Energy Holdings (REH) jumped after wave energy developer, Carnegie Wave Energy (in which REH holds a 9.7% stake) said the first government payment for its Australian Perth Wave Energy Project had been approved. The 248,561 Australian dollar handout was for the completion of the Basis of Design for the Perth Wave Energy Project at Garden Island and completion of the community consultation and risk management plans for the project. REH shares were up 10.7%. Top performing sectors so far todayElectricity 8,813.99 +1.60%Automobiles & Parts 5,162.45 +1.01%Industrial Transportation 2,343.89 +0.79%Technology Hardware & Equipment 779.01 +0.77%Mobile Telecommunications 4,131.04 +0.76%Bottom performing sectors so far todayFood & Drug Retailers 4,123.19 -1.61%Industrial Engineering 7,686.07 -1.08%Electronic & Electrical Equipment 3,440.76 -0.93%Chemicals 8,804.04 -0.91%Health Care Equipment & Services 3,851.07 -0.66%BC