The Investment Column: Insurance and oil head the sectors to watch in 2007

The consensus in the City is that economic growth will slow over the next 12 months, which in turn will moderate earnings growth. This means that cyclical industries like engineering, consumer and electrical goods and so-called general industrials are best avoided.

The oil sector also looks set to do well. BP saw its shares price lose ground last year while Shell finished flat on the year. One reason for this underperformance is that many investors have taken money out of the mega-cap stocks that make up the industry and put it into smaller companies vulnerable to takeover in an attempt to capitalise on the M&A boom.

independent