Sector movers: Industrial engineering, Aerospace lead gains

(Sharecast News) - Industrial engineer Spirax Sarco and BAE Systems spearheaded gains in their respective sectors at the start of the week.

In a session with little new news in terms of economic data or corporate announcements, moves were dictated by the latest broker research.

Buoying Spirax were positive comments out of Goldman Sachs for sector peers Weir and Smiths Group.

Analysts at Citi meanwhile opened a Catalyst Watch on BAE Systems ahead of Australia's expected announcement, in March, of which submarine design it had selected, that from the UK or the one from the US.

It was widely assumed that it would be the latter, the analysts said, but there had been some recent hits that the former might be the case.

Furthermore, BAE ran the shipyard where they would likely be built so the engineer was likely to benefit regardless.

Worth noting too in the case of BAE were the heightened geopolitical tensions at the weekend amid news that the US had downed three more 'flying objects'.

Defensive areas of the market, including Utilities and Tobacco, were also on the up with shares of Severn Trent and United Utilities benefitting from upwards target price revisions out of analysts at RBC.

In the background, investors were waiting on what some economists believed would be a key report on US consumer prices for the month of January due out the next day.

The details of the report, many believed, might heavily influence expectations for interest rate hikes across the Pond until mid-2023 with a pause until after June seen by some as increasingly unlikely.

Against that backdrop, and with longer-term Gilt yields edging higher, home construction stocks were under pressure.

Yet the biggest source of selling pressure in that corner of the stock market were downgrades out of Deutsche Bank on Persimmon, to 'sell', and for Taylor Wimpey and Barratt Developments to 'hold'.

Jefferies and Liberum were also out with somewhat cautious comments themselves.

In the case of Liberum, its analysts told clients in a research note that: "We still see good upside in the sector, but are somewhat more selective after the 36% bounce (from lows).

"Our top picks are those we feel confident can outperform on differentiation (Vistry & MJ Gleeson*) or excessive sector discount (Bellway)."

Top performing sectors so far today

Industrial Engineering 15,291.89 +2.51%

Aerospace and Defence 5,369.05 +1.93%

Personal Care, Drug and Grocery Stores 4,194.43 +1.44%

Gas, Water & Multiutilities 5,980.49 +1.38%

Tobacco 33,883.97 +1.31%

Bottom performing sectors so far today

Household Goods & Home Construction 11,462.95 -2.63%

Telecommunications Service Providers 2,353.07 -0.77%

Precious Metals and Mining 10,829.03 -0.42%

Oil, Gas and Coal 9,059.05 -0.21%

Investment Banking and Brokerage Services 12,399.55 -0.13%