Sector movers: Banks gain, amid improved sentiment towards Italian lenders

Banks as a group continued to gain altitude, tracking an advance by peers in the States during the previous session and amid 'market-chatter' that limited state aid might be extended to stricken Italian lender Banca Monte dei Paschi di Siena.

Significantly, investors also appeared to be differentiating between Italian lenders in the wake of ex-Prime Minister Matteo Renzi's constitutional referendum, although talk of government aid was likely a factor.

As of 1534 GMT, stock in Banca Monte dei Paschi di Siena was down by just 0.86% at €18.52 and trading far above the day's lows as 'market-chatter' focused on the possibility for outside help, while stock in Unicredit was up by 6%.

RBS and HSBC were spearheading gains, with sentiment towards the latter also boosted by supportive comments from analysts at Morgan Stanley.

Acting as a backdrop, the Stoxx 600 gauge of lenders' shares was jumping 4.26% to 164.27.

Morgan Stanley upgraded its recommendations on shares of SocGen, UBS and HSBC, telling clients: "We look for an inflection in earnings growth as NII troughs and cost saves are executed. All in the context of finalization of Basel III framework, allowing for re-calibration of business models and capital plans."

Electricity stocks were also higher, but only as shares of Drax rocketed following the announcement that it was to scoop up Opus Energy for £340m and that it has inked an agreement to acquire four open cycle gas turbine (OCGT) development projects for electricity generation.

Going in the opposite direction, Miners were on the back foot as copper prices reversed course to trade lower, with March 2017 COMEX futures slipping 0.52% to change hands at $2.6840 a pound.

Financial services firms were the worst of the lot after the Financial Conduct Authority said it was planning to clamp down on the sale by spread betting companies of contracts for difference (CFD) and binary bet products to less experienced traders, including limiting leverage and preventing companies from attracting customers with special bonus introductory offers.

Top performing sectors so far today
Banks 4,058.06 +2.81%
Real Estate Investment Trusts 2,710.11 +1.54%
Real Estate Investment & Services 2,376.11 +1.26%
Electricity 8,662.97 +1.10%
Construction & Materials 6,409.45 +0.95%

Bottom performing sectors so far today
Industrial Metals & Mining 2,228.76 -3.70%
Financial Services 8,931.14 -2.51%
Mining 14,600.11 -2.19%
Industrial Engineering 10,082.30 -1.47%
Software & Computer Services 1,804.50 -1.07%