Posts from — June 2009

Financial Market Comments from Tim Hughes, Head of Sales Trading, IG Index.

After looking like it might rally very early on, at mid-morning the FTSE is pretty flat and seems to be heading downwards again.

First up it seemed like miners were trying to dig deep to turn round recent significant losses, Xstrata were up a couple of percent, only to fall back again as the morning progressed.

Banks faired better though, with Lloyds leading the way; clearly all those recent heavy selling sessions have made them look all rosy and ripe again.

In truth though, it’s still pretty directionless stuff. Perhaps understandably so, as there’s no doubt what the big financial story of the day in the UK is.

And even if Chancellor Darling and Governor King seem to be at slight odds about how to reform the City; one thing is for sure, traders and investors are slightly nervous just what the outcome will be.

The markets are looking very tired right now. We’ve all clearly overdone the green shoot spotting.

Economists, busy too: apportioning blame, fingers wagging either at consumers, the government or the bosses of banks – or all three.

The espresso of stimulus packages have clearly done their bit. But, with today’s news of poor retail sales figures in the UK serving as a reminder that homes are still struggling to make ends meet, it’s difficult to see where the economic energy is going to come from to pull us out of this.

And with the spectre of ‘Regulation’ hovering, it’s not hard to see why the FTSE 100 bulls are resting at 4500, the bears at 4300, both biting their nails.

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.

Good Luck!

DB

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.

Financial Market Comments from Anthony Grech, Market Strategist, IG Index.

At the mid-morning mark the FTSE has steadied, after yesterday’s disappointing losses, and is so far up on the day.

Lonmin, Xstra and Eurasian Natural Resources are among the miners who are again performing badly, but they’ve been offset by strong performing retail stocks.

Tesco is going well after announcing a robust 4.3% rise in first quarter like-for-like sales in the UK, and, as usual, that’s dragged its closest competitors higher, especially Sainsbury’s who are due to report figures tomorrow.

Banks too are rallying with RBS and Lloyds leading the way. The latter doing well after news broke at the weekend that it has attracted interest from the Commonwealth Bank of Australia for its fund management arm.

Good news too for the UK economy, with the CPI figures out today suggesting that UK inflation is slowing. With similar US figures due for release tomorrow investors will be hoping for more signs that the rally is sustainable.

It will be interesting to see if this rally continues and so dismissing the fears of some who took yesterday’s unexpected dip to be a sign that a sell-off is imminent.

It really does feel like it could go either way at the moment. Almost a perfect calm, with the bulls on the left and the bears on the right, eying each other, either side evenly matched and either one ready to pounce and take the market in the direction they want.

They, like us, will be watching the open on Wall Street this afternoon very keenly.

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.

Good Luck!

DB

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.

Financial Market Comments from Philip Gillet, Sales Trader, IG Index.

Starting the week the FTSE 100 has faltered upon opening, currently trading 80 points lower on the day.

Miners were the main culprit for this poor opening as they took a combined hit from a strong dollar coupled with a fall in commodity prices.

Recently investors have looked to the mining sector as the driving force behind any significant gains in the market, however today sees the sector making up the top five losers on the FTSE.

The biggest faller is Lonmin, down 129.00 points (8.91%) at 11am (London time), following production issues at one of its key South African furnaces. While the rest of the industry suffered as a result, investors will be keen to capitalise on any rebound the sector may offer over the coming days.

Positive news came from the CBI today, with director general Richard Lambert commenting that the harshest period of recession is now behind us. However he tempered this with advice that investors should not get carried away with talk of ‘green shoots’ of recovery.

As we have seen the markets maintain a holding pattern between the 4300 to 4500 range in recent weeks, this can only seem like good advice. It is becoming increasingly difficult to take a view on whether the markets are indeed out of the woods yet and ready to finally make a sustained challenge on the psychological 4500 level.

Right now investors seem happy taking any quick wins while they can, waiting to see where the next major movements will come from.

If this is to be the week to change the mix then we will need to see more positive news from the wider economy before investors finally manage to get off the fence.

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.

Good Luck!

DB

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.

Financial Market Comments from David Jones, Chief Market Strategist, IG Index.

In early morning trading in London, it is another quiet day for UK shares so far.

It has been confirmed that Blackrock are buying the investment division of Barclays bank, with Barclays holding on to a 20% stake in business.

This news comes as no surprise to the markets and the weakness today for the Barclays share price seems a case of “buy the rumour, sell the fact”.

Barclays shares had rallied by almost 20% over the past week or so and, for now, the 300p mark still seems to be something of a psychological barrier to any more progress.

Telecoms business BT Group is the biggest gainer in blue chips so far, up by around 5% on the back of an investment bank’s upgrade.

The initial momentum from this morning’s open still seems strong and the next big level technical traders are eyeing is the 100p mark – this has successfully stopped any strength over the past couple of months, so it would not be surprising to see some of the bullishness fade as the day goes on.

Looking ahead to the US, we are expecting the Dow Jones index to open slightly down, around 10 points below last night’s close. As with UK markets at the moment, there seems a lack of conviction in any direction for US stocks.

Yesterday saw the US index push out to its best levels since early January, but this strength faded and most of these gains were given back very quickly.

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.

Good Luck!

DB

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.

Financial Market Comments from Anthony Grech, Market Strategist, IG Index.

After the opening hours of trading this morning, the FTSE is hovering fairly level, up just 0.2% so far.

While there is a skip in the step for the wider UK economy, with an unexpected rise in industrial output for April heralding a spate of optimism from analysts, the markets continue to trundle feebly from one end of a narrow range to the other.

Investors increasingly seem to be turning to alternative trading arenas, with currency an attractive option, as sterling today hit a high for the year against the euro, albeit before tailing off again slightly.

The relative political stability of the past day or two – at least when compared with the previous week’s attempted political coup – is helping to keep the currency on track. And we have also seen a not insignificant bounce of 16% in mortgage approvals in April.

Also see GBP/USD Spread Betting.

So the green shoots are coming thick and fast, but the question still remains: are they going to blossom into anything meaningful in terms of stock market activity?

With the FTSE sitting at a level virtually identical to where it was a month ago, and with a very narrow range of less than 200 points movement over the course of the month, the incentive to make short- to medium-term investment in the index is waning.

For now at least then, trading on the stock market is still very much a waiting game. But once the floodgates open we may see some impressive

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.

Good Luck!

DB

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.