Sector movers: Miners, oilfield services outperform
Commodity-related sectors performed best on Wednesday, boosted by slightly stronger than expected readings on Chinese and euro area manufacturing sector activity in April.
Significantly, Caixin's private sector-compiled Purchasing Managers' Index picked-up from a fourth month low of 51.0 for March to 51.1 last month (consensus: 51.0).
In parallel, IHS Markit's Eurozone factory sector PMI for April was revised slightly higher, although as with the Chinese survey, weakness was evident in the subindex linked to new export orders. Some companies also expressed concerns around ongoing trade frictions globally.
"While the current pace of growth remains solid, the trend in the surveys in coming months will provide important clues as to the degree to which underlying demand may be waning and the extent to which policymakers should be concerned about the health of the economy," IHS Markit's Chris Williamson said.
On a more cautious note, Caroline Bain at Capital Economics pointed out that the favourable impact on the sector of Chinese officials' recent move to loosen the unusually stringent pollution controls they had placed on the country's manufacturers would soon fade.
Combined with regulatory tightening and slower credit growth, she said, "[...] This is one factor underpinning our view that most energy and metals prices will end the year lower."
Be that as it may, three-month LME copper futures were trading higher by 0.12% to $6,950 per metric tonne come 1524 BST, alongside bigger gains in aluminium and nickel futures.
Precious metals miners were also finding a bid, despite the backdrop of a US dollar spot index at four-month highs, which had been weighing on the price of gold and silver over recent sessions.
Linked to the oil equipment and services space, analysts at JP Morgan bumped up their target price for Petrofac following their recent site visit, the first in eight years.
That trip, they said, had revealed that confidence was returning across the core Middle East and North Africa regions, underpinning the company's medium-term prospects.
Meanwhile, and in the Construction space, it was all about US-exposed CRH, after the company announced it had begun to carry out the first phase of its €1bn share buyback programme in earnest, having entered into arrangements with UBS to repurchase ordinary shares on its behalf, up to a maximum consideration of €350m, as the first phase of its plans.
Top performing sectors so far today
Industrial Metals & Mining +4.25%
Oil Equipment, Services & Distribution +3.18%
Leisure Goods +2.51%
Construction & Materials +1.62%
Bottom performing sectors so far today
Personal Goods -1.09%
General Retailers -0.99%
Electronic & Electrical Equipment -0.84%
Fixed Line Telecommunications -0.63%
Real Estate Investment Trusts -0.52%