Sector movers: Steel and mining stocks rise as futures surge

7th Nov 2016 15:50

(ShareCast News) - Steel and mining stocks paced gains as key commodity futures surged at the start of the week.On 4 November, the local government of China's largest steel city, Tangshan, issued an urgent notice ordering all coking and sintering plants, together with blast furnaces, to halt production following several days of heavy pollution."We view this movement to have a short-term positive impact on Chinese steel prices given Tangshan produces 11% of China's total crude steel, but with Tangshan mills viewed as the marginal buyers of seaborne iron ore we expect some pressure on this price," analysts at Macquarie said in a research note sent to clients that same day.Chinese steel rebar futures gained 3.7% to $450.4 per tonne.Copper futures were also higher, with the three-month LME-traded contract ahead by 0.7% to $4,991.00 per metric tonne as of 1330 GMT.Prices for copper reached $5,000 per tonne on 4 December, supported by supply fears after a 6.3-magnitude earthquake in Chile.Codelco said its only major mine in the south of that country was unaffected. Nonetheless, analysts at the same Australian broker also said the metal had begun to show price risks to the upside, "with fundamentals improving and physical market terms turning more bullish lately."Zinc and tin futures on the other hand were lower on Monday.Precious metals were also on the backfoot after the US Federal Bureau of Investigation said late on 6 November that presidential candidate Hillary Clinton's use of unauthorised email servers during her time as Secretary of State was not criminal.That pushed the US dollar higher, in turn weighing on the prices of gold and silver, with COMEX-traded gold futures for delivery in December down by 1.78% to $1,281.30/oz..To take note of too, Chinese coking coal futures rocketed by their maximum daily allowed percentage limit of 10%, with the January 2017 contract on the Dalian Commodities Exchange notching up an all-time record high of 1,516 yuan.HSBC led the way higher among banks after reporting that underlying profits were higher in all four of its business functions during the third quarter and better than the market expected.Nevertheless, the entire sector had already been bolstered by the news regarding Clinton, with the US KBW Bank Index up by 2.48% to 75.20, bringing it within spitting distance of the year's highs at 76.91, and 10-year bond yields climbing higher on both side of the Pond.Life insurers were also getting a boost from the rise in yields.Top performing sectors so far todayIndustrial Metals & Mining 1,973.68 +6.65%Mining 13,822.37 +3.86%Banks 3,800.88 +3.17%Technology Hardware & Equipment 919.84 +2.75%Life Insurance 6,839.73 +2.37%Bottom performing sectors so far todayFood & Drug Retailers 3,021.15 -0.45%Gas, Water & Multiutilities 6,149.76 -0.42%