Sector movers: Miners, Big Oil lead gains

Shares of miners outperformed at the start of the week on the back of multiple bullish factors, especially Beijing's drive to cut pollution ahead of the winter.

China's war on smog and the expected impact that would have on steel output helped push rebar prices up from $627.1 per metric tonne to $630.9/mt.

Hebei province's move to halve steel and iron ore production in major producing cities were tightening supply of iron ore amid a 'bullish' outlook for market demand in 2018, said analyst at SP Angel.

Giving miners another leg up was positive commentary out of analysts at Macquarie.

In a research note sent to clients, analysts at the Australian broker said: "The mining sector should trade at a discount to the broader equity market. Topline volatility and a poor track record of capital allocation in the good times have "earned" this discount. However the current discount for the diversified miners relative to the FTSE 100 is at near extreme levels (2.5 to 3 turns lower versus an historical discount of 1x EV/EBITDA) which in our view is no longer justified."

Within that same note, Macquarie reiterated a 'buy' recommendation for shares of Glencore and said they were shifting their preference from Rio Tinto to BHP.

Also in the spotlight on Monday was Big Oil as Brent crude oil futures continued to gain altitude, reaching a two-year high at $62.90.

For Kathleen Brooks, research director at City Index, Brent futures may also have found a 'safe haven' bid following a move at the weekend by Saudi Crown Prince Mohammed bin Salman to detain several of the Kingdom's wealthiest individual in an anti-corruption drive.

"This weekend an anti-corruption drive by Prime Mohammad bin Salman has seen the arrest of the well-known champion of capitalism Prime Alwaleed bin Talal among other officials and has rattled investors, stock exchanges across the Middle East have fallen at the start of this week. However, this hasn’t hurt the oil price as yet," Brooks said.

Crude oil futures also found support from the latest US rig count data from Baker Hughes, published on 3 November, which revealed a a drop of 8 rigs to 729.

Top performing sectors so far today

Industrial Metals & Mining 3,409.80 +1.92%
Automobiles & Parts 7,561.30 +1.60%
Fixed Line Telecommunications 2,971.41 +0.99%
Mining 17,979.80 +0.94%
Oil & Gas Producers 8,962.39 +0.86%

Bottom performing sectors so far today
Industrial Engineering 12,348.40 -1.21%
Food & Drug Retailers 2,870.03 -0.98%
Electronic & Electrical Equipment 6,594.98 -0.82%
Construction & Materials 6,728.15 -0.75%
General Industrials 6,467.07 -0.65%