Sector movers: Engineers pace gains

9th Aug 2018 17:12

(Sharecast News) - Cyclicals were pacing gains in the market on Thursday, with Industrial Engineering and Industrial Metals&Mining leading the advance.Within the former, investors were continuing to bid shares of steam systems engineer Spirax Sarco higher a day after the release of its first half numbers.The company posted a 28% jump in revenue to £547.6m, with organic growth for the six months ended 30 June put at 7%.Adjusted operating profit meanwhile was ahead 24% to £125.7m or 15% higher on organic terms, while its adjusted operating profit margin fell 60 basis points to 23%.Nevertheless, not everyone was on board, with analysts at Numis having reportedly downgraded their recommendation on the shares from 'add' to 'hold', although they kept their target price at 7,000p.The broker's analysts conceded the company's long-term track record merited a "significant premium" versus the sector and said they could see upside risks to their revised estimates.However, they cautioned that "recent share price run has pushed Spirax to a PER of 27x, which means we struggle to see sufficient upside on a 12 month view to maintain our Add rating." Ferrexpo meanwhile was responsible for gains in Metals&Mining, with the shares coming off their 52-week lows, possibly helped by speculation of improved pricing for iron ore in the third quarter.62% Fe iron ore prices had rising for a third week last week, averaging $67.34 per tonne, and while it had struggled to climb past $68 per tonne since March, there were upside risks present for the third quarter outlook, according to analysts at Metal Bulletin.Those included ongoing high crude steel production and weak domestic iron ore supply."The Chinese government has announced that the winter cuts will be put in place again this year, from the start of October until the end of March this time, restricting capacity utilization at 50%. Our experience from last winter's cuts is that although production was dampened in specific regions in the north China, total national output still grew as mills operating in other regions more than compensated for the production losses."Top performing sectors so far todayLeisure Goods 7,968.89 +2.40%Industrial Engineering 13,477.65 +1.99%Chemicals 17,139.51 +1.48%Industrial Metals & Mining 5,007.70 +1.32%Software & Computer Services 1,889.17 +1.18%Bottom performing sectors so far todayFixed Line Telecommunications 2,643.07 -4.18%Oil & Gas Producers 9,484.39 -1.85%Construction & Materials 6,255.67 -1.62%Beverages 22,436.97 -1.08%Automobiles & Parts 10,837.93 -0.74%