Engineering giant GKN gave the automobile sector a lift on Tuesday afternoon following its well-received full-year results, while banks were leading the downside as cyclical stocks were hammered in the wake of the Italian elections.

GKN, which makes technologies and products for vehicles and aircrafts across the world, reported annual profits for 2012 as sales grew across all four of its divisions.

The company posted a 19% year-on-year increase in profit before tax of £497m following strong performance from operations including automotive and aerospace. Revenues rose 13% to £6.9bn.

Both figures beat forecasts by Jefferies, which said that while the company will have a "challenging start" to 2013, there is a "sound platform for good future growth".

"Against a stable demand backdrop, GKN should make very strong progress, in our view," the broker said as it reiterated its 'buy' rating and 275p target price for the stock.

Shares were up 4.52% at 263.7p by the close of trade.

Banking stocks, meanwhile, were registering steep losses as risk appetite waned on the back of the inconclusive outcome of the national elections in Italy.

With anti-austerity parties faring so well in the voting, there are fears that the government may struggle to pass through the reforms aimed at tackling its budget. With the country now seen by many as "ungovernable", a second election down the line is now looking likely.

UK lenders Barclays, Lloyds and RBS were firmly out of favour with the latter weighed down by comments from Nomura ahead of its full-year results on Thursday.

The broker said that RBS "still faces material uncertainties with respect to deleveraging, asset quality and the future shape of operations, and remain cautiously positioned on the name."

RBS was down 4.0% at 340.6p by the close.


Top performing sectors so far today
Automobiles & Parts 6,191.20 +4.95%
Construction & Materials 3,944.28 +0.59%
Chemicals 9,233.51 +0.37%
Tobacco 38,023.38 +0.01%

Bottom performing sectors so far today
Banks 4,974.36 -2.49%
Industrial Metals & Mining 2,748.30 -2.48%
Financial Services 6,414.59 -2.19%
Life Insurance 5,366.84 -2.01%
Food & Drug Retailers 4,408.50 -1.98%

BC

Related share prices
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GKN (GKN) share price
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Royal Bank of Scotland Group (RBS) share price