Sector movers: Oil producers' and lenders' shares pace gains

(Sharecast News) - Big Oil and lenders' shares paced gains on the FTSE 350 as equities rebounded, despite the uncertainty around the war in Ukraine and going into the Federal Reserve's and Bank of England's rate hike decisions anticipated for over the next two days. Crude oil futures were in fact modestly lower on Tuesday, but there were increasing indications over the long weekend that the European Union was moving closer still towards starting to pare its imports of crude oil from Russia.

That prompted analysts at RBC Capital Markets to muse out loud: "With the Russia-Ukraine military conflict grinding into a brutal war of attrition, the EU is seen as moving closer with plans to end imports of Russian oil by year-end.

"The ultimate price response to such a move could hinge on three wild cards: the potential Russian retaliation; Asia's ability and inclination to absorb the distressed barrels; and OPEC's willingness to deploy its spare capacity on a expedited timeline."

Shares in all the main UK banking groups were higher ahead of the expected Fed and BoE hikes.

Nonetheless, in terms of the 'big picture', lenders' shares on both sides of the Pond were for the most part off the highs seen at the start of 2022 and before the Ukraine war.

StanChart however had fared better than the others in the UK and did so again on Tuesday, helped in part by an upwards target price revision out of Deutsche Bank from 630.0p to 800.0p.

Commenting on the market backdrop, Andrew Garthwaite at Credit Suisse noted how readings on investor sentiment were throwing off 'buy' signals, but added that structural risks to the downside remained.

Highly oversold readings on the S&P 500 and "high" net corporate buying were also supportive factors, Garthwaite said.

On the flip-side, earnings revisions had turned negative and credit spreads had widened by more than implied by equity performance.

Chris Beauchamp, chief market analyst at IG, echoed those views, saying: "Last time US stocks fell to these levels back in March a savage bounce followed, but earnings season has not really delivered enough good news for a rally to develop.

"In any case this week's action-packed calendar will probably hold both buyers and sellers in check for the time being."

Top performing sectors so far today

Oil, Gas and Coal 7,600.47 +3.12%

Aerospace and Defence 4,669.35 +2.40%

Telecommunications Service Providers 3,111.63 +2.01%

Banks 3,184.71 +1.82%

Retailers 3,032.24 +1.56%

Bottom performing sectors so far today

Real Estate Investment Trusts 3,109.60 -4.99%

Industrial Engineering 14,233.05 -3.46%

Chemicals 13,293.08 -2.78%

Real Estate Investment & Services 2,642.28 -1.84%

Electronic & Electrical Equipment 9,457.94 -1.51%