Sector movers: Steel-makers and miners pace gains
Renewed gains in the of bulk metals pushed Steel and Mining stocks higher for a second day.
Weather-induced disruptions to iron ore shipments were seen by one trading outfit as the chief factor behind the price gains, while falling LME copper stocks were though to account for gains in that industrial metal.
That helped to drive gains in the likes of Anglo American, Vedanta or Glencore.
For its part, analysts at Bank of America-Merill Lynch hiked their fourth quarter 2015 forecast for the price of iron ore from $50 a tonne to $66. The investment bank also lifted its forecasts for 2017 and 2018 to $69 and $55 per tonne, respectively, citing upward revisions to its estimates of the cost curve for the sector and demand from steel mills for higher quality ores.
Yet the biggest gain was to be seen in shares of steel-maker Evraz, as Chinese steel rebar futures jumped from $443.4 per tonne to $446.6 a tonne during Asian trading hours.
On a related note, figures from worldsteel published on 21 November showed global steel production running at its fastest pace since the last quarter of 2014 in October.
Nonetheless, commenting on the above data analysts at Macquarie said: "Thus, the recovery continues, but given the weak base we might have expected even stronger numbers. Ex-China demand is still struggling to grow, and global margins remain under pressure – indeed spot Chinese rebar margins are now even more negative than those seen in late 2015."
Worth noting, in Tuesdy´s session stock in Evraz not only hit fresh 52-week highs, it also came up against the 50% Fibonacci retracement of the entire share price drop from its January 2012 highs.
Precious metals miners were left out of the move higher for the wider sector as December 2016 gold futures slipped, drifting 0.14% lower to $1,208.10 an ounce.
In a research note published on 21 November, strategists at Goldman Sachs lowered their three and six-month price forecasts for gold to $1,200 an ounce, flagging the risk from potential physical ETF liquidation.
Looking out to 12 months however, Goldman still saw the yellow metal recovering to trade at $1,250 a tonne.
Top performing sectors so far today
Industrial Metals & Mining 2,500.59 +5.57%
Mining 14,713.77 +3.35%
Industrial Engineering 9,771.64 +2.50%
Forestry & Paper 17,514.23 +2.39%
Oil Equipment, Services & Distribution 15,089.74 +1.91%
Bottom performing sectors so far today
Electronic & Electrical Equipment 4,929.48 -0.91%
Beverages 15,878.71 -0.24%
Industrial Transportation 2,972.66 -0.20%
Travel & Leisure 8,343.81 -0.13%
Automobiles & Parts 7,219.95 -0.10%