Sector movers: Commodity price gains drive miners, Big Oil higher
(ShareCast News) - Miners and oil companies rode gains in their respective underlying commodities higher amid a pick-up in risk appetite more generally, as a widely-followed indicator (albeit sometimes misleading) of the US jobs market roared ahead.
"US markets opened higher after the latest ADP payrolls report beat expectations of 185k for March, coming in at 263k, and raising the prospect of another +200k jobs report on Friday. The strength of the numbers though is likely to play into the argument that wage growth is likely to remain sluggish.
"The sustained resilience of the numbers would appear to suggest there is still plenty of slack in the US jobs market, which in turn would suggest that we could well see an increase in the participation rate in Friday's official payroll numbers," said Michael Hewson, chief market analyst at CMC Markets UK.
Nevertheless, commodities markets were already on the frontfoot from the beginning of the session after Chinese traders returned from their holidays, bidding up industrial metals across the board.
By the close of the session in London, May 2017 copper futures on COMEX were ahead by 2.49% to $2.6770 a pound.
Anglo American specifically also got a hand up from analysts at HSBC, who reiterated a 'Buy' on its shares.
Crude oil futures were also higher, despite an unexpected 1.6m barrel build in US oil inventories during the latest reference week as per the Department of Energy's weekly tally of the country's stockpiles, although crude futures did come off sharply.
Analysts at Capital Economics pointed to higher US production, reduced exports and a draw from the Strategic Petroleum Reserve as some of the factors behind the build.
Disruptions in Libya and Nigeria were supporting crude futures, the same research shop said.
Big Oil also benefited from positive comments out of Goldman Sachs on Royal Dutch Shell's 'B' shares.
Going the other way, Croda and AstraZeneca weighed on Chemicals and Pharma with Credit Suisse downgrading the former to 'Underperform' and UBS cutting its recommendation on the latter from 'Buy' to 'Neutral'.
Top performing sectors so far today
Industrial Metals & Mining 2,509.15 +2.64%
Mining 16,094.13 +1.50%
Oil Equipment, Services & Distribution 16,285.12 +1.49%
Software & Computer Services 1,965.70 +1.22%
Oil & Gas Producers 7,938.57 +1.15%
Bottom performing sectors so far today
Chemicals 12,629.69 -1.36%
Pharmaceuticals & Biotechnology 14,257.84 -0.88%
Forestry & Paper 20,993.38 -0.71%
Financial Services 9,838.31 -0.27%
Life Insurance 8,070.32 -0.21%