Weir Leads Drop of Engineering Stocks as Commodities Tumble
Weir Group Plc (WEIR) fell the most in seven weeks in London trading, leading a decline among engineering companies in Europe, amid concern that slowing economic growth will undercut demand for metals, fuel and food.
Weir, based in Glasgow, Scotland, dropped as much as 142 pence, or 8.6 percent, to 1,507 pence, the biggest intraday decline since Aug. 8, and was down 6.1 percent as of 4:22 p.m, giving the company a market value of 3.3 billion pounds ($5.1 billion).
Weir Group is “playing catch-up with the rest of the engineering sector, as well as with worse performances from the mining and oil & gas sectors,” wrote Oliver Wynne-James, an analyst at Panmure Gordon & Co. in London. He has a “hold” recommendation on the stock.
The company, the world’s biggest maker of pumps for the mining industry, said in August that market conditions in the unit “are expected to remain positive.” Weir’s oil and gas business has been benefiting from the fact that more than half of North American rigs are currently focused on oil, a level not seen since the mid-1990s.
Full-year profit will be “somewhat ahead” of previous forecasts because of revenue growth at the oil and gas business, Chief Executive Officer Keith Cochrane said on Aug. 2.
European engineering stocks that dropped today included Finnish rock-crushing equipment manufacturer Metso Oyj (MEO1V), which fell as much as 7 percent in Helsinki trading, and Sandvik AB (SAND), the Swedish maker of mining and metal-cutting equipment, which declined as much as 5.3 percent in Stockholm.
The Standard & Poor’s GSCI Index of 24 commodities fell as much as 2.2 percent, the most since Dec. 2. The index is down 7.8 percent this week, the most since May 6. Silver slumped 10 percent, copper was down 2.7 percent and nickel dropped 3.1 percent.
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