Sector movers: Smith & Nephew boosts health care stocks

2nd Feb 2012 14:11

The health care equipment and services sector was the best performer on Thursday afternoon after some well-received results from medical devices maker Smith & Nephew.The company saw revenue rise 3.66% to $1,106m in the final three months of 2011 from $1,067m in the corresponding quarter of last year, a tad below market expectations of $1,115m. Underlying revenue growth was 3% year-on-year. While pre-tax profit fell from $258m to $210m, the company highlighted an improvement in the trading margin from 19.8% to 25.2%, above its 24% target.Shares were up 4.49% at 640p by 14:25.The miners were also performing well, with sector giants Glencore and Xstrata surging on the FTSE 100 after the groups confirmed speculation that they are in talks about a merger of equals. A merger of mining outfit Xstrata and commodities trader Glencore could create a leviathan valued at around £52bn. Both stocks were in demand today, with Xstrata jumping 10% and Glencore up a lesser, but still impressive, 7%. Chris Searle, corporate finance partner at BDO LLP, said that this was no real surprise given that Glencore already owns a substantial stake in Xstrata. "Whether this merger triggers another round of consolidation in the industry remains to be seen, given anti-trust concerns around the world, but other companies may feel forced to merge just to keep up with this new giant," he said. Speculation seems to have driven the share prices in the sector higher, with Vedanta Resources, Anglo American, Antofagasta and Randgold Resources making strong gains. In contrast, the food producers and processors sector was in decline, with sector giant Unilever providing a drag.Shares in the consumer goods giant were left on the shelf after the Anglo-Dutch company reported revenues below expectations and expressed worries over input costs and the global economy. Turnover for the fourth quarter was €11.564bn, a rise of 6.9% against the same period of 2010. However, the market consensus had been for an 8.3% rise. Underlying sales growth for the quarter came in at 6.6% with price increases accounting for 6.5% with volume only chipping in 0.1%. Market consensus had pencilled in a underlying sales growth of 6.8%.BCTop performing sectors so far todayHealth Care Equipment & Services 3,606.19 +4.14%Mining 23,594.10 +2.80%Chemicals 7,817.80 +1.59%Oil Equipment, Services & Distribution 24,138.91 +1.40%Financial Services 4,948.98 +1.15%Bottom performing sectors so far todayFood Producers & Processors 5,334.52 -3.35%Pharmaceuticals & Biotechnology 9,756.05 -2.12%Technology Hardware & Equipment 750.64 -1.12%Gas, Water & Multiutilities 4,664.13 -1.05%Oil & Gas Producers 8,577.29 -0.90%