Shares of power producers fell sharply as momentum into the sector slowed.
The gains for defensive sectors such as utilities in recent months foreshadow an economic slowdown, said one brokerage. “Defensive sectors now comprise a weight within the momentum factor that historically only happens during a recession,” said analysts at brokerage Morgan Stanley, in a note to clients.
German utility Uniper, the central European nation’s biggest buyer of Russian gas, said it had received a letter from Gazprom that claims force majeure, a legal declaration that exempts the company from fulfilling contractual obligations because of circumstances outside its control.
Vistra shares rose after Morgan Stanley said the power generator stood to gain from a surge in electricity prices in Texas related to a heat wave there.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
July 18, 2022 17:38 ET (21:38 GMT)
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Read More: Utilities Down as Sector’s Upward Momentum Slows — Utilities Roundup