Sector movers: Industrial engineers, miners jump at quarter-end

Cyclicals were clearly in favour heading into the end of the first quarter, on the back of positive analyst chatter out of some of the top brokers in the world and as prices for most key industrial metals reversed their losses seen in overnight trading.

Industrial engineers were doing best after analysts at Credit Suisse flagged an inflection point in the order trends seen across Europe, US and Asia in the last quarter, from between -1% to -6% in the prior quarter to between 1% to 2% over the most recent three-month stretch.

"In Resources, orders for shorter-cycle mining equipment hit double-digit growth with a pick-up in replacement. In O&G, fewer large projects drove a yoy decline but better trends were seen in December/January," the Swiss broker said.

That helped to jack-up Weir Group's stock to the top of its sector performance table.

However, the same analysts cautioned that some names in the European Capital Goods space were facing a "mismatch" between rising raw material prices (which took place in the backhalf of 2016) and increases in the prices of the wares they themselves flog (which were taking place in the first half of 2017).

Rotork and IMI also got favourable endorsements from that same research shop.

Industrial metals & miners were also finding a bid on Thursday, with Credit Suisse again the main instigator behind share price gains for many of the sector's constituents.

Analyst Liam Fitzpatrick nudged his target price for Glencore up from 400p to 410p while at the same time reiterating his 'Outperform' stance on the stock.

In a separate note, he upgraded his view on Vedanta to 'Neutral'.

Acting as a backdrop, as of 1635 GMT May 2017 gold futures on COMEX were ahead by 1.05% to $2.7055 a pound.

BAE Systems was a top gainer in its own space, caught in an updraft in the form a positive note out of Citi.

Analysts Charkes Armitage and Devang Doshi told clients they saw "a lot of uncertainty" regarding hopes for a large increase for government spending on its sector from the States.

"The view in DC is Trump has to maintain the momentum for change, otherwise risks getting bogged down by the bureaucracy. Will he move on to other areas and maintain the momentum? Mulvaney (OMB) seen as pivotal — a deficit hawk and appears to have the President’s ear – This does not appear to bode well for massive budget increases and a spending free-for-all."

Nonetheless, the shares were solid value, Citi said. It set a target price of 720p per share and said that if interest rates rose faster than inflation that would help the company's underfunded pensions.

Top performing sectors so far today

Industrial Engineering 11,384.43 +1.48%
Forestry & Paper 21,284.20 +1.39%
Industrial Metals & Mining 2,448.22 +1.11%
Mining 15,830.19 +0.86%
Aerospace and Defence 5,014.05 +0.81%

Bottom performing sectors so far today
Fixed Line Telecommunications 3,645.82 -1.74%
Electricity 8,624.99 -1.67%
Health Care Equipment & Services 7,469.30 -1.39%
Mobile Telecommunications 4,715.52 -1.31%
Real Estate Investment Trusts 2,845.74 -1.27%