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Sector movers: Miners move up en masse as commodity index peaks
Miners led the charge on Wednesday, lifted by various factors, including rising commodities prices and bullish analyst opinions.
Diversified miners Glencore, Rio Tinto, Anglo American, BHP Billiton and Antofagasta dominated the leaderboard, with precious metals focused Fresnillo and Randgold Resources also sparkling.
Some metals prices were being squeezed higher by US sanctions on Russia, including aluminium and nickel. There was little impact on base metals from China's surprise move to cut banks' reserve requirement ratio on Tuesday, analysts said, apart from on domestic steel and coal prices.
The CRB commodity index rose more than 1% to reach its highest level since October 2015. Oil prices were also at their highest levels since late 2014, with Brent crude up 3% to more than $73 a barrel.
Rio also issued first quarter production figures, characterised by one analyst as higher compared with the same quarter last year but generally below the last. Pilbara iron ore shipments at 80.3m tonnes were up 5% year-on-year. The company reiterated its guidance for a range of 330-340m tonnes of iron ore shipments during 2018.
Rio, Glencore and BHP also benefited from a note by HSBC, which said they were among the standout stocks in the sector.
The bank's analysts also put out a reassuring note on base metals, with China economists believing that mutual economic interest should draw the US and China back to the negotiating table, with China to call for a negotiated outcome to the trade dispute, and its continued focus on supply and environment.
Fundamentals in China remain robust, HSBC said, with macro factors such as energy demand, industrial production, private consumption, and exports pointing to decent underlying demand. "China has strong control over infrastructure investment, and is likely to pull funding levers in order to accelerate demand if required. We see stable to gradually improving demand in Q2/Q3 as a result."
Bleakley Financial said oil was a main contributor to the commodities rise, nickel was spiking on worries of further Russian sanctions on Norilsk Nickel, the world's second-biggest producer.
The health care equipment & services was strong as South African private hospitals group Mediclinic gave its shares a shot in the arm by reporting annual profits are expected to be marginally ahead of earlier expectations. The main stimulant for the business has been a "significant" second half improvement in its Middle East hospital, while the Southern Africa business has also shone.
"We are succeeding with the turnaround of the Abu Dhabi business and laying the foundation for long-term, sustainable performance," directors said.
Top performing sectors so far today
Mining 18,551.56 +5.99%
Industrial Metals & Mining 4,072.87 +4.46%
Oil Equipment, Services & Distribution 12,578.35 +3.64%
Oil & Gas Producers 8,895.87 +2.67%
Health Care Equipment & Services 8,021.11 +2.62%
Bottom performing sectors so far today
Tobacco 41,926.48 -1.88%
Insurance (non-life) 3,177.92 -0.24%
Chemicals 14,966.39 -0.17%
Food Producers & Processors 7,303.71 -0.15%