Sector movers: Miners, Oil&Gas see biggest gains
(ShareCast News) - Miners gained altitude with some traders linking those gains to the weaker pound, which boosts the results of companies reporting in US dollars.
Helping the sector advance, Chinese futures markets closed for holidays, copper futures Stateside were trading slightly higher, with May 2017 COMEX-traded copper up by 0.25% at $2.6100 a pound by the closing bell in London.
Increased political angst ahead of a meeting between the US and Chinese leaders, at the end of the week, and related to the French presidential elections also contributed to rising precious metals prices.
Worth noting too perhaps, given the influence of fund managers, the Stoxx 600 sector gauge for Basic Resource shares underperformed the wider index in the first quarter, although it was soundly ahead on a 12-month basis.
The drop in Sterling on the back of recent weak economic data in the UK also fed through into strength for Aerospace and Defence names.
Bringing up the rear was Oil&Gas, with oil majors BP and Royal Dutch Shell gaining ground ahead of the release of key US weekly oil inventory data scheduled for Tuesday evening and, especially, the official Department of Energy figures on due out on Wednesday.
"There appears to be an expectation that the next lot of inventory data will support Opec secretary general (Mohammed) Barkindo's assertion that the oil market is slowing coming back to balance and that we will see a fall in US stockpiles when inventory data is released later today and tomorrow," said Michael Hewson, chief market analyst at CMC Markets.
Analysts were expecting the DoE to report a 700,000 barrel drop for the latest reference week, according to a Bloomberg survey.
Shares of BP got an added fillip in the form of an upgrade out of Deutsche Bank from 'Hold' to 'Buy'.
"In doing so we position for anticipated newsflow on project starts (Egypt, Oman, UK, T&T) and external indications that Macondo cash outflows are now moderating," the analysts said in their cheery note.
Food producers were at the bottom of the pile despite an upgrade on European Food & Beverage stocks from the same broker on expectations US Treasury yields would soon head lower again as skepticism around the White House's fiscal stimulus plans grew, benefitting some of the more defensive sectors.
Deutsche upgraded both Food & Beverage stocks and Utilities.
Also linked to the US economy was the downdraft in auto stocks and banks, with the latter also feeding off the sharp drop in Gilt yields since the start of the second quarter.
Figures on US light vehicle sales for March, published after the close of London markets on Tuesday, rolled in at 16.53m units, well below the 17.30m which analysts had forecast.
Top performing sectors so far today
Mining 15,818.38 +1.97%
Industrial Metals & Mining 2,445.74 +1.23%
Oil & Gas Producers 7,845.67 +1.22%
Software & Computer Services 1,944.14 +1.20%
Aerospace and Defence 4,964.49 +1.19%
Bottom performing sectors so far today
Food Producers & Processors 7,812.29 -1.52%
Automobiles & Parts 8,417.04 -0.83%
Food & Drug Retailers 2,946.52 -0.69%
Fixed Line Telecommunications 3,624.80 -0.62%
Banks 4,171.35 -0.48%