A shift in trends is occurring among investors, price data and a poll of fund managers has shown.
Some savvy investors are considering going against the grain - by selling off their energy shares buying up bank stocks.
Shares in large financial firms have been hammered over the past year due to a loss of market confidence in the sector with the onset of the credit crunch. Some large banks, including Citigroup and UBS, have seen a near-60 percent erosion in share value due to the crunch. This has been matched with energy stocks flying high, due to all-time record wholesale prices.
However, investors with exposure to energy firms have recently been spooked by the continuing decline of oil prices, the Guardian reports. After hitting a high of $147 earlier this year, barrels of crude are now hovering at around the $120 level.
A gain in this price was not attained last week, even despite the conflict in Georgia putting a major supply line to Europe at risk. This has led analysts to suggest that the energy sector will continue to lose value over months to come.
Coupled with this is a corresponding recovery in financial stocks, with Barclays and HSBC now trading at 30 to 40 percent up on their previous lows.
Evidence that these trends are causing a shift in investors' thinking is found in the latest Merrill Lynch fund manager survey, which found that the number of investment professionals overweight in oil and gas stocks dropped from 52 percent to 11 percent from June to July, and the number underweight in banks dropped from 57 percent to 40 percent.
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