Sector movers: Big Oil drags on stocks

(Sharecast News) - Oil and Gas dragged on the main stock market benchmarks, as did Construction and Materials names. Weighing on the former was news that the Fed's preferred inflation gauge had picked up more than expected over the first quarter, which helped the US dollar catch a bid, in turning weighing on oil futures.

Nonetheless, by the end of the session, front-dated Brent crude oil had turned around and was gaining 0.76% to $78.28 a barrel on the ICE.

According to the Department of Commerce, the price deflator for personal consumption expenditures advanced at a quarterly annualised clip of 4.9%, against a gain of 4.4% over the preceding quarter and the 4.7% forecast by economists.

Significantly, it also implied that the March reading for core PCE prices due out the next day would come in at 0.5% month-on-month, which would be too high for the Fed.

Hence, Fed funds futures moved back to pricing in a further 25 basis point hike in the Fed funds target range by the central bank at its 2-3 May meeting.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, conceded that the risks now lay to the upside but stuck to his call for an increase of 0.3% on the month.

Among other reasons, he pointed to the potential for downwards revisions to estimates for previous months.

"The trend in the monthly core PCE gains is slowing, but it has not yet slowed far enough, especially in the core services ex-rent component, to reassure the Fed," he said.

Going the other way, cyclical areas of the market such as Autos and Parts paced gains.

Lenders' shares were also higher as investors reacted positively to the latest quarterly figures from Barclays and jitters around the sector on either side of the Atlantic appeared to ebb.

Top performing sectors so far today

Automobiles & Parts 1,713.48 +3.87%

Telecommunications Service Providers 2,528.92 +1.93%

Electronic & Electrical Equipment 9,920.39 +1.37%

Non-life Insurance 3,198.79 +1.18%

Banks 3,531.88 +1.02%

Bottom performing sectors so far today

Industrial Transportation 3,374.23 -2.88%

Media 10,111.72 -1.58%

Oil, Gas and Coal 8,546.16 -1.50%

Tobacco 32,574.08 -1.38%

Construction & Materials 7,875.76 -1.26%