Sector movers: Miners gain on Citi note, Chinese credit data
Miners found a bid at the start of the week on the back of positive commentary out of analysts at Citi and the release of stronger-than-expected bank lending and credit figures in China.
Analysts at Citi reiterated a positive stance on Miners, citing the recent pull-back in the sector and the increased bullishness of the broker's commodities team for 2018.
"The buy thesis is predicated on the ongoing de-rating of valuations against the market, robustness of cash flows along with improved balance sheets which we think can translate into additional cash returns. Management discipline, especially compared to previous cycles, will be key to the sector maintaining a leadership role in 2018," Citi said.
In the same note, the analysts said Rio Tinto, BHP, Glencore, South 32, Antofagasta, Kaz Minerals, Vedanta and Randgold were their 'top picks'.
Also on Monday, the People's Bank of China published data showing that new bank lending picked-up from 663bn yuan in October to 1.12trn yuan (consensus: 800bn yuan) for November.
Likewise, so-called Total Social Financing, a broader measure of financing preferred by the PBoC, increased by 1.6trn yuan (consensus: 1.225trn yuan) last month after a rise of 1.04trn in October.
Despite the stronger-than-expected data, some analysts underlined that upon seasonal adjustment the TSF measure had in fact slowed between October and November.
On a cheerier note, strategists at HSBC told clients they were expecting to see "above consensus" Chinese GDP growth of 6.7% in 2018 thanks to the ongoing recovery in exports and industrial upgrading.
Top performing sectors so far today
Industrial Metals & Mining 3,506.29 +3.63%
Forestry & Paper 18,688.31 +2.42%
Oil Equipment, Services & Distribution 12,901.33 +2.25%
Mining 16,827.38 +1.71%
Banks 4,524.41 +1.52%
Bottom performing sectors so far today
Real Estate Investment Trusts 2,988.36 -0.75%
General Retailers 2,479.06 -0.70%
Insurance (non-life) 3,021.62 -0.53%
Health Care Equipment & Services 7,610.61 -0.34%
Gas, Water & Multiutilities 5,168.60 -0.32%