Sector movers: Software finds a bid as rebound in bond yields pauses

Tuesday’s pricing action for the FTSE 350 mirrored the previous session where recreational goods and software found a bid while mining and banking lagged behind.

Overall, however, the shares continued to gain.

The key to this change in happiness lay, at least in part, in government bond yields, which interrupted their recovery on both sides of the Atlantic. Analysts argued that US Treasuries were at least oversold.

As of 1953 GMT, the yield on 10-year US Treasury bills had declined six basis points to 1.54%, while the yield on gilts of similar date had declined three basis points to 0.73%.

However, share prices were also influenced by company-specific news.

That was especially true for Softcat – the UK and Ireland’s leading IT reseller – which rose higher after Morgan Stanley started “overweighting” stocks.

The broker’s analysts cited indications from their industry contacts of a strong recovery in IT spending at the plants after the pandemic was over.

In the minus column, housing investors kept their powder dry before a number of impending risk events for the sector emerged, including the RICS housing survey (Thursday) and a January GDP reading (Friday).

Annual results of Ibstock (on Wednesday) and a trade update from Berkeley Group (on Friday) were also in preparation.

Most powerful industries to date

Leisure articles 24,230.90 + 6.35%

Industrial engineering 15,341.04 + 2.49%

Automobiles & Parts 4,816.01 + 2.48%

Software & Computer Services 1,953.64 + 2.35%

General retailers 2,578.43 + 2.26%

Sectors below average so far

Mining 24,463.42 -2.62%

Banks 2,923.67 -1.34%

Industrial Metals & Mining 5,921.62 -0.91%

Household goods & housing construction 17,698.78 -0.60%

Fixed line telecommunications 1,642.61 -0.34%

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