Sector movers: Aerospace finds a bid, analysts divided on budget airlines and Rolls Royce

Aerospace and Defence names were again higher, although analysts' opinions were a little divided when it came to the likes of engineer Rolls Royce or budget airlines.

Among those who were more unequivocally 'bullish', at least in general terms, was Credit Suisse strategist Andrew Garthwaite.

On Tuesday, Garthwaite told clients to overweight cyclicals on the back of what some market commentary labelled a 'breakthrough' in efforts to develop a Covid-19 vaccine, in the form of Pfizer and BioNTech's vaccine candidate.

Aviation however was not his top preference in Europe, although it was among the top four: transport, diversified financials, airlines and mining.

His colleagues meanwhile reiterated their outperform stance on RyanAir (target went from €15.16 to €17.23), Wizz Air (target went from 4,377p to 4,889p), and Easyjet (target went from 729p to 840p).

Analysts at Morgan Stanley however were considerably less impressed with the latest vaccine news, as they had pretty much already been expecting a one, they explained.

So while the news around Pfizer meant that downside risks were receding, a "lot of the recovery upside" had now been priced-in", they argued.

Indeed, in the UK, IAG and Easyjet might still need to access further liquidity resources over the course of 2021, Morgan Stanley said.

As for Rolls Royce, the day before JP Morgan had recommended clients "sell this rally" after the shares ran up 44%.

In the same research note, JP Morgan sounded a positive note on the outlook for European chemicals stocks, including Elementis and Synthomer.

Investors were also seen dipping their toes into so-called 'value stocks', including the likes of BT Group, British American Tobacco and Imperial Brands.

Top performing sectors so far today

Fixed Line Telecommunications 1,462.87 +10.73%

Oil Equipment, Services & Distribution 4,976.45 +8.02%

Chemicals 13,441.54 +5.48%

Tobacco 27,936.43 +4.92%

Aerospace and Defence 3,419.00 +4.88%

Bottom performing sectors so far today

Leisure Goods 25,191.16 -4.63%

Equity Investment Instruments 11,826.19 -1.47%

Software & Computer Services 1,883.20 -1.03%

Food & Drug Retailers 4,053.58 -0.79%

Technology Hardware & Equipment 2,180.81 -0.72%