LIVE MARKETS-Watch oil

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WATCH OIL

Geopolitical tensions are back and this puts oil prices squarely in focus as a key driver for market direction.

From this view, Citi has tactically lifted energy to neutral, whereas its commodity team expects disruptions to energy flows to be limited and sees lower oil prices over the medium-term.

"Geopolitical flare-ups typically have a transitory impact on stocks outside of sustained energy price spikes. Over the near term, the path of oil will most likely dictate the path of equities," says Citi strategist Beata Manthey.

But it's not just about energy stocks.

For investors navigating this landscape, Citi has other suggestions. "The UK is our favorite geopolitical hedge in a global context; Personal Care and Health Care are our preferred Defensive sectors in Europe," the strategist adds.

(Danilo Masoni)

FOR WEDNESDAY'S OTHER LIVE MARKETS POSTS:

STOXX HOVERS AROUND FLAT, MIDEAST ESCALATION KEEPS MOOD TENSE CLICK HERE

EUROPE BEFORE THE BELL: SLIGHTLY HIGHER AS MIDDLE EAST TENSION FLARES CLICK HERE