Sector movers: SSE lights up electricity stocks after broker upgrade

29th Aug 2012 15:04

Gains for heavyweight utilities group SSE meant that the electricity sector was the best performing category on Wednesday afternoon.The company announced late on that power generation at its Glendoe hydro electric scheme, near Loch Ness, has re-started three years after a rock fall occurred in one of the tunnels.Paul Smith, Managing Director of Generation at SSE said: "The work to restore electricity generation at Glendoe has been undertaken in a very rigorous way to make sure that this strategic asset meets its original design criteria and is ready to play its full part in supporting the country's electricity system for many decades to come. SSE was also being pushed higher by today after Bank of America Merrill Lynch (BofA ML) upgraded its rating on the stock as part of its review of the European utilities sector.The broker lifted its recommendation from 'neutral' to 'buy', explaining that the company's tariff increase announced last week has erased a downside risk to earnings. The firm announced on August 22nd that prices for its household customers in the UK are to increase on average by 9% for both electricity and gas from the middle of October."The move underpins the profitability of the supply division and gives us greater confidence in the medium-term outlook for EPS and DPS progression," the broker said.Shares in Andes Energia had jumped nearly 17% this afternoon, while sector peers Drax and Helius Energy were registering small gains.BofA ML also upgraded its stance on energy group Centrica from 'underperform' to 'neutral', providing a lift to shares and the wider gas, water and multiutilities sector.Top performing sectors so far todayElectricity 8,502.82 +1.40%Real Estate Investment & Services 1,734.72 +0.83%Technology Hardware & Equipment 788.09 +0.79%Gas, Water & Multiutilities 5,312.41 +0.78%Beverages 12,718.37 +0.66%Bottom performing sectors so far todayIndustrial Metals & Mining 2,436.70 -2.01%Mining 17,619.66 -1.65%Banks 3,680.88 -0.71%Life Insurance 4,498.44 -0.47%Personal Goods 20,698.15 -0.38%BC