Banks and Telecommunications were among the top performing sectors as the more value-oriented UK stock market outperformed its global peers.
Underscoring the reasons for the above, Credit Suisse analysts’ latest regional and sector scorecards, which were published on Thursday, showed Energy and Banks as the best placed sectors to be in.
Those scorecards looked at multiple factors, such as valuations, company fundamentals including earnings and price momentum, positioning and macro sensitivities.
Regarding the latter of those, in the background, yields on 10-year gilts remained within striking distance of their 52-week highs.
Boosting yields, which benefits lenders, the latest US weekly jobless claims data kept expectations for further policy tightening by the Federal Reserve on table.
“The relative resilience of labor markets thus far suggests the disinflationary process is still at an early stage and raises the risks of more aggressive Fed rate hikes,” Mickey Levy and Mahmoud Abu Ghzalah at Berenberg Capital Markets said in a research report sent to clients earlier in the session.
Telecoms also did better in this month’s scorecards from a macro standpoint, alongside Energy and Tobacco, as the “biggest beneficiaries on our anticipated macro backdrop (rising inflation, rising bond yields, flat dollar, but falling PMIs),” Credit Suisse said.
As regarded positioning nevertheless, Telecoms remained among the consensus shorts and their fundamentals were among the worst.
In parallel, and at the individual company level meanwhile, analysts at HSBC upgraded their recommendation for shares of BT Group to ‘buy’.
The flip side to gilt yields near their 52-week highs – alongside US dollar strength – was gold trading just slightly above its 52-week lows.
That was duly reflected in precious metals miners’ share prices which on Thursday fell to the bottom of the leaderboard.
Top performing sectors so far today
Automobiles & Parts 1,659.61 +9.30%
Household Goods & Home Construction 10,703.56 +3.69%
Leisure Goods 17,696.17 +2.45%
Banks 3,372.67 +1.84%
Telecommunications Service Providers 2,689.97 +1.51%
Bottom performing sectors so far today
Precious Metals and Mining 9,771.81 -2.22%
Food Producers 5,240.06 -1.96%
Personal Goods 28,585.38 -1.87%
Gas, Water & Multiutilities 5,740.98 -1.64%
Industrial Engineering 13,184.37 -1.38%
