(Sharecast News) – Cyclicals were firmly in the lead in the middle of the week on hopes for a continued strong economic rebound in Asia.
It was that backdrop that drove Autos&Parts to the top of the leaderboard, following the release of figures in China showing continued strength in the Asian giant’s passenger car market in December.
The year-on-year rate of unit sales in China was 7.7% or 2.4m units in absolute terms, a three-year high.
Going the other way, Oil Equipment and Services was the main drag on the FTSE 350 after analysts at Jefferies downgraded stock in Wood Group to ‘underperform’
“We see significant downward revisions ahead to 2021 consensus revenue,” they said in a research note sent to clients.
“We allow for a positive market recovery bias in our 260p/sh price target, +20p on previous but after the strong rally in recent months we expect top-line reality to pressure the stock.”
Pharma also displayed weakness.
“However, in a world where equity strategists are calling for new market highs and the continued rotation out of defensives, we expect only the value names to outperform,” said analysts at Liberum.
“As such Novartis (BUY) and GSK (BUY) are our Top Picks while we are most cautious on Roche (HOLD).”
Analysts also sounded a bit more downbeat note on the outlook for the sector in 2021.
That was especially the case for GlaxoSmithKline, whose shares they downgraded to ‘underperform’ after cutting their forecast for its 2022 dividend per share from 80p to 50p.
The drug giant would be forced to slash its payout and reinvest more to boost it “poor” Research and Development productivity and hence its product pipeline, the Swiss broker explained.
Banks and Life Insurance dipped, tracking a dip in longer-term bond yields in the States even as stockmarkets notched up fresh record highs.
Top performing sectors so far today
Automobiles & Parts 4,169.50 +3.24%
Health Care Equipment & Services 7,034.49 +2.50%
Mining 24,203.39 +2.27%
Industrial Metals & Mining 5,441.68 +2.26%
Chemicals 14,109.03 +2.25%
Bottom performing sectors so far today
Oil Equipment, Services & Distribution 5,479.50 -4.15%
Pharmaceuticals & Biotechnology 16,384.10 -1.25%
Banks 2,585.17 -0.70%
Life Insurance 7,506.71 -0.39%
Personal Goods 36,994.21 -0.34%
