Financial Market Comments from David Jones, Chief Market Strategist, IG Index.
The FTSE 100 is currently trading lower on the day, down 0.55% at 5214.69.
The UK’s leading index is experiencing a slight hang over from yesterday’s trading in Wall Street, as the US markets delivered a cocktail of poor housing data and profit taking.
Grocer’s Tesco and Sainsbury’s were among the early gainers. Tesco benefitted from Nomura Holdings Inc. increasing its price estimate on the grocer’s shares, pointing to the prospect of increased profitability and foreign sales.
And Sainsburys’s share price gained following reports that Qatar Holding could raise its stake in Sainsburys. Currently Tesco has rallied 1.94% (7.45p), with Sainsbury’s up 0.58% (2.00p).
While there is still positive momentum in the markets, news out of the US yesterday will be raising some alarm bells.
Investors engaged in profit taking following the release of poor US housing data, leaving the Dow Jones to close lower on the day.
Analysts are predicting that the UK’s October CBI industrial trends survey, due out shortly, will indicate that recovery in the manufacturing sector is faltering.
It seems that while we may be heading out of a recession, the pace of recovery may be sluggish at best, and we could well see more profit-taking on the horizon.
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