Sector movers: M&A boosts oilfield services, JP Morgan upgrades miners

Stock in Amec Foster Wheeler pushed the oil equipment and services sector to the fore after agreeing to an all-share offer from rival Wood Group valued at £2.2bn.

Oil Equipment, Services & Distribution

4,928.34

16:30 25/09/24

0.00%

0.00

Wood Group (John)

49.84p

15:39 15/11/24

-1.70%

-0.86p

Strikingly, shares in Wood Group were also higher following the news.

Amec shareholders will own around 44% of the share capital of the combined group and the merger is expected to be earnings-accretive on an adjusted earnings per share basis for both Wood Group and Amec in the first full year following completion and significantly accretive once full run rate synergies are achieved.

It was expected that the combined group would be able to achieve sustainable cost synergies of at least £110m.

Miners were also making an upside move after JP Morgan strategist Mislav Matejka raised his recommendation on the group from 'Neutral' to 'Outperform', telling clients that free cash flow yields were improving and valuations attractive.

Explaining the rational for his move, Matejka pointed out how miners' shares had lost 12% in February, explaining that they were also the second worst performers over the last three months.

He specifically mentioned shares in Rio Tinto, which fell 14% last month.

Steel-maker Evraz and BT Group led their respective sectors lower, with shares in the former dropping back to their 200-day moving average as Chinese steel rebar futures declined from $570.0 a metric tonne to $564.0.

For its part, stock in BT Group appeared to be continuing to climb back towards its levels prior to 23 January, the day it informed the market of an accounting scandal at its Italian unit.

Top performing sectors so far today
Oil Equipment, Services & Distribution 16,224.15 +4.33%
Mining 15,722.55 +3.01%
General Industrials 6,073.83 +1.24%
Forestry & Paper 20,400.95 +0.80%
Support Services 7,459.49 +0.68%

Bottom performing sectors so far today
Industrial Metals & Mining 2,159.42 -2.90%
Fixed Line Telecommunications 3,810.64 -2.74%
Personal Goods 35,296.53 -0.69%
Construction & Materials 6,970.27 -0.55%
Mobile Telecommunications 4,595.13 -0.30%