Sector movers: Banks buck falling market

Banks' shares managed to swim against the tide of a falling stock market on Tuesday as investors played it safe going into the announcement of the US central bank's policy decision scheduled for the next day.

Up until 10 June, financial markets had been highly confident that the Federal Reserve would only raise the target range for the Fed funds rate by 50 basis points.

However, the release of a stronger-than-expected reading on consumer price inflation on 9 June followed by survey data showing a further rise in US consumers' inflation expectations the next day led some economists to posit that the Fed should perhaps "surprise" markets with a larger hike to help ensure that inflation expectations remained well-anchored.

HSBC, which is highly sensitive to interest rates in the States, was among the top gainers, alongside Asia-focused StanChart with shares of both advancing by roughly 3.5%.

The latter also benefitted from an upwards target price revision out of analysts at Bank of America from 750.0p to 780.0p following a positive trading update out of the lender.

On the back of that update, BofA revised its estimates for StanChart's Financial Markets revenues over 2022-24 higher by $100m annually.

The broker also lifted its estimates for the same lender's net interest income to reflect the move higher in yield curves for a total $0.05 bump up to earnings per share in each of 2023-24.

Close Brothers Group was another top gainer, rising 3% after RBC Capital Markets upgraded the shares from 'sector perform' to 'outperform', telling clients that the bank's valuation now offered a good entry point.

Lloyds and Natwest Group shares meanwhile added roughly 1% each and those of Barclays added 0.5%.

Top performing sectors so far today

Banks 3,199.95 +2.48%

Household Goods & Home Construction 12,912.16 +2.25%

Oil, Gas and Coal 7,900.16 +1.22%

Aerospace and Defence 4,736.58 +1.02%

Tobacco 36,585.57 +0.96%

Bottom performing sectors so far today

Leisure Goods 15,189.52 -5.07%

Electricity 10,132.08 -3.59%

Industrial Transportation 2,854.21 -3.26%

Chemicals 11,193.95 -2.82%

Precious Metals and Mining 10,164.85 -2.77%