Sector movers: M&A drives price action
Fresh activity on the Merger&Acquisitions front sent Software stocks to the top of the leaderboard at the start of the second quarter, just one day after the S&P 500 got off to its worst April start since 1929, losing 2.2% in just one session.
Thus, shares of financial technology outfit Fidessa surged to the top of the leaderboard for the second-tier index after receiving two approaches, one of which bested the terms offered by Switzerland's Temenos by 5%.
Given jitters in stockmarkets, it was no surprise to find Tobacco also putting in a good performance.
Nevertheless, strategists at JP Morgan were still constructive on the outlook for shares, telling clients to add to their positions, pointing - among other factors - to real interest rates still in negative territory and the as yet uninverted US Treasury yield curve to back up their case.
Shares of GKN on the other hand were weighing on the Automobiles&Parts sector after its shareholders accepted Melrose Industries £8.1bn buyout bid.
Aerospace&Defence stocks were right behind, as Credit Suisse cut its target price for Meggitt from 390p to 365p, citing the likely launch by Boeing of its New Midmarket Airplane before year-end (preceded by an announcement possibly as soon as this next summer).
With Meggitt expected to participate in equipments and engine components for the NMA, the resulting investment was likely to weigh on its free cash flow generation, the Swiss broker said.
M&A was also the common denominator in the Electronical&Electrical equipment space, after instrumentation specialist Spectris announced the purchase of US-based automotive test system and service provider, Revolutionary Engineering, for $19m.
Top performing sectors so far today
Software & Computer Services +1.91%
Tobacco +0.51%
Leisure Goods +0.43%
Chemicals +0.26%
Real Estate Investment Trusts +0.26%
Bottom performing sectors so far today
Automobiles & Parts -3.32%
Aerospace and Defence -1.55%
Electronic & Electrical Equipment -1.49%
Industrial Metals & Mining -1.37%
Electricity -1.28%