Financial Market Comments from Philip Gillet, IG Index.
At mid morning in London it is another positive start for UK stocks.
Early trading has seen the FTSE 100 make an attempt on the 4500 level – the highest the index has been in nearly two weeks.
Focus this morning has been on the retail sector, with Marks and Spencer announcing that annual profits have dropped by a third and restating its cautious outlook for the year ahead.
This has knocked M&S back to the bottom of the FTSE performers for the day, with the shares off by around 6%.
However, they are off their worst levels for the day with some still seeing the 300p mark as support for the price. This area has underpinned any weakness for more than a month now.
Inflation is the day’s other big news, with the CPI continuing to move lower, dropping more than the market was expecting for April.
All this has helped keep the pound attractive in early trading with GBP/USD moving out to its best levels for five months – and finally cracking the $1.5400 barrier that had kept rallies in check this year.
This is leaving some traders eyeing up December highs at $1.5700 as the next target.
Looking ahead to the US open, at the moment we are expecting the Dow Jones to open up around 20 points higher from last night’s close. The US index too has now clawed back virtually all of last week’s losses.
However the current rally may start to stall as it moves back to the highs from earlier in the month – around 8600.
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