Sector movers: Oil producers and services lifted as crude rebounds

Oil-related sectors were lifted on Wednesday as crude oil prices climbed back up to three-and-a-half-year highs after Donald Trump confirmed that the US will be withdrawing from the Iran nuclear deal and sanctions will be restored.

Trump's decision was trickier than appeared on the surface, noted Ken Odeluga, market analyst at City Index. "The President left several doors open for continued dialogue between the US and Iran. Room for co-signatories to the Joint Comprehensive Plan of Action to continue discussions with Iran and around their own compliance with new sanctions was also apparent. Trump and his administration took pains to stress openness to a new deal. That was another way of saying that much was still unclear."

Amid this lack of clarity, oil prices slipped further, before Brent crude rebounded as high as $77.4 per barrel.

The travel and leisure sector was dragged down as Compass Group and Tui stock fell as both companies reported on interim results.

Contract caterer Compass served up slightly soft first-half sales and profits. Organic growth in the second quarter of 3.7% was not quite as strong as expected, reflecting the effects of Easter timing, bad weather and the demobilisation of contracts in Europe and the US. EBIT before exceptionals fell 2% to £864m, which was 2% below the average City forecast of £880m.

Anglo-German tour operator Tui cut first-half losses as strong demand for ocean holidays continued, with management reiterating full year guidance for EBITA growth “of at least 10%” and the medium term target of “doubling of profit between 2014 and 2020”

Top performing sectors so far today

Oil Equipment, Services & Distribution +3.63%
Oil & Gas Producers +3.52%
Tobacco +3.42%
Automobiles & Parts +3.20%
Industrial Metals & Mining +3.15%

Bottom performing sectors so far today

Travel & Leisure -1.21%
Aerospace and Defence -0.25%
Insurance (non-life) -0.21%
Personal Goods -0.05%
Beverages -0.02%