Supermarkets and pharmaceuticals were the sectors that held up the best across the FTSE350 during the coronavirus-driven stock market sell-off of recent weeks, says Bowmore Asset Management, the asset manager.Over the first quarter of this year supermarkets and pharmaceuticals both saw share price falls of 10%* (despite their defensive qualities) – compared to a fall in the FTSE350 of 27% over the same period.
Meanwhile, the worst performing sector of the FTSE350 over this period was automobile parts manufacturers, down 54%, followed by travel, pubs and betting, down 50%, and high street retailers (non-food), down 46% – see full graph below.
FTSE350 pub groups saw their share prices fall 59% on average, with Marstons falling the furthest at 68%, as pubs were ordered shut for the first time in British history.
Only 15 FTSE350 companies saw their share prices rise over the first quarter of this year. Of these companies, three were gold miners and two were pharmaceuticals companies. Other risers included REITs with large exposures to healthcare properties.
The companies which saw the biggest share price falls included outsourcer Capita (-81%), cinema chain Cineworld (-77%), cruise operator Carnival (-73%) and airlines group IAG (-66%). Please see table with risers and fallers below*.
Charles Incledon, Client Director at Bowmore Asset Management says: “Shares have been hit hard by the coronavirus sell off, but some have fared better than others.”
“As you might expect, consumer staples such as supermarkets have seen strong demand in recent weeks as shoppers look to stock up during lockdown but even these businesses have seen share prices fall. Pharmaceutical shares have also been under pressure despite the sector normally being more defensive in a slowing economy. You might have expected pharmaceuticals to be more resilient during a healthcare crisis, but this has been an indiscriminate stock market crash.”
“Airlines, hotels and travel agents have had a really tough ride and the sector is likely to remain volatile. At the other end of the spectrum, some household goods and online grocers have done well compared to the wider market.”
“Although the economy has taken a tumble that doesn’t automatically turn good businesses into bad ones overnight. Many have also implemented cost-cutting plans to manage cashflow to ensure they are in a relatively strong position to weather the economic storm.”
Top 5 best and worst performing sectors across the FTSE350 in Q1 2020*
Best and worst performing stocks across the FTSE350 in Q1 2020*
*Source London Stock Exchange
