Sector movers: Defensives sought out, Big Oil catches a bid

Investors sought out the more defensive areas of the market on Wednesday, including Pharmaceuticals and Gas, Water and Multiutilities, as the head of the US central bank sounded a somewhat hawkish note.

Federal Reserve boss, Jerome Powell, said financial markets expectations for rate hikes were "pretty well aligned with where we´re going", but stressed that "we will not allow a transition from a low inflation environment to a high inflation environment."

"Given the skittish nature of investors right now, Powell’s comment about controlling inflation requiring ‘some pain’ was bound to cause more investors to hit the sell button," said IG chief market analyst Chris Beauchamp.

"Given the greater robustness of the US economy, it is not surprising to see European markets in the red following these comments while Wall Street holds its small gains for now."

Powell was speaking at the European Central Bank's policy forum in Sintra, Portugal.

And he was not alone, speaking at the same venue, Bank of England Governor, Andrew Bailey, left the door open to a 50 basis point hike in interest rates at the Monetary Policy Committee's meeting in July.

Tempering those remarks however, Bailey added that the UK economy was at "somewhat of a turning point."

Brent crude oil futures however continued to edge closer to the psychological $120 per barrel mark on the ICE, buoying shares in the oil patch.

As an aside, Bloomberg cited Adam Posen, from the Petersen Institute for International Economics, as having judged a proposed price cap for Russian oil exports as destined to fail because China and Russia would likely not adhere to it.

Ex-International Monetary Fund chief economist, Simon Johnson, on the other hand reportedly backed such proposals.

Also worth noting, due to the potential implications for the growth outlook, overnight Chinese President, Xi Jinping, said the current zero Covid policy remained the most "economic and efficient" policy for his country.

Top performing sectors so far today

Oil, Gas and Coal 7,542.65 +2.27%

Leisure Goods 16,648.61 +1.52%

Industrial Metals & Mining 6,927.14 +0.99%

Pharmaceuticals & Biotechnology 21,845.22 +0.69%

Gas, Water & Multiutilities 5,966.41 +0.66%

Bottom performing sectors so far today

Real Estate Investment Trusts 2,806.51 -3.71%

Beverages 27,078.54 -3.42%

Automobiles & Parts 1,801.98 -2.76%

Travel & Leisure 5,840.94 -1.63%

Chemicals 11,524.22 -1.52%