Financial Market Comments from Anthony Grech, IG Index.
It has started off as another choppy day in London that sees the market slightly higher than Wednesday’s close.
After starting off under pressure and pushing below 4300 to hit the lowest levels seen in a week, the FTSE has bounced back to trade up around 20 points on the day so far.
Focus was on telecoms group BT as it reported a loss for the year of £134 million and announced plans to cut jobs. However, much of the initial sell-off seen for the shares has been regained, with traders still taking the view that, despite a slashing of the dividend, there is still value to be had in the company at these levels.
The market seems reasonably balanced between winners and losers for the day so far. Yesterday’s sell off both here and in the US may have come as something of a shock after the strong rises seen in recent months and the relatively calm trading we had seen over the previous couple of days.
Having said that, all it has done so far is push the market back to where it was early last week and there still seem to be enough people out there convinced that this morning’s slide back to 4300 is just a buying opportunity.
Looking ahead to the US, index futures have firmed a little over night compared to last night’s close. At the moment we are expecting the Dow Jones to open up around 20 points.
US traders also seems happy to keep the faith in the two month rally for now – although the producer price inflation figures due out ahead of the market open have the potential, at least, to put a dent in that optimism.
Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.
For those of you who love conspiracy theories…of particular interest over the last few months has been the resurgence of the banking sector from the lows in March.
Perhaps the fact that bankers were forced to take much of their bonuses in Stock rather than cash had something to do with this? Bonuses are generally paid in March, coincidentally the low point for most bank shares.
If I was, say, a Barclays employee it would have been very nice to pick up stock options down at around 70p (price now 240p). In conversation with an investment banker friend of mine he was rather chuffed to discover that, at current valuations, his bonus this year is now worth far in excess of anything he received in the past.
Admittedly he must wait a few years to cash it in. Ah well, ‘plus ca change, plus c’est la meme chose’.
Also see today’s Spread Trading Comment.