Sector movers: Miners drag despite rebound in China PMIs
By Alexander Bueso
Date: Tuesday 31 Jan 2023
(Sharecast News) - Miners dragged on London stocks despite the release of Chinese Purchasing Managers' Indices that revealed a big rebound in factory and services activity.
The 'official' manufacturing sector PMI rose by 3.1 points from December to 50.1 in January (consensus: 49.8).
In parallel, the services PMI surged by 14.6 points to 54.0 as many Chinese embarked on their first trip back home in the country's provinces in years.
Yet in the background, LME aluminum, copper and tin futures all traded lower, likely due to the drag from recent US dollar strength ahead of the Federal Reserve's next interest rate meeting.
"China is likely to begin a meaningful recovery post-Chinese New Year. The PMIs show month-to-month improvement for new orders in manufacturing, construction and, especially, services. Businesses have become rightly more optimistic about future prospects, after the phasing out of zero-Covid policy," said economists at Pantheon Macroeconomics.
"We expect consumption and private investment to lead the recovery, while the property sector will follow more slowly and exports act as a drag."
On the positive side of things, Diageo was boosted by an upgrade from 'hold' to 'buy' out of Investec.
The broker cited the shares' valuation in the wake of recent share price declines for the move.
They also argued that the slowdown in the US during the first half of the year was the result of tough comparables and not of "any worrying consumer trends."
Top performing sectors so far today
Beverages 26,901.90 +3.04%
Retailers 3,387.48 +1.29%
Chemicals 12,479.75 +1.18%
Tobacco 33,910.08 +0.84%
Personal Care, Drug and Grocery Stores 4,147.05 +0.51%
Bottom performing sectors so far today
Real Estate Investment Trusts 2,414.71 -1.29%
Telecommunications Service Providers 2,334.95 -1.20%
Industrial Engineering 14,789.71 -1.05%
Automobiles & Parts 1,464.13 -0.99%
Industrial Metals & Mining 8,168.67 -0.88%
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