Posts from — November 2009

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

The FTSE 100 got off to a positive start this morning, boosted by skyrocketing gold prices.

Currently, the UK’s leading index is trading at the 5338 level (11am London time) as miner’s reap the benefits of the rising price of gold.

The yellow metal has hit an all-time high of $1167.35 an ounce as investors sought security from the weakening Dollar.

Randgold and Fresnillo are the biggest benefactors, up 4.55% and 4.68% respectively, while Rio Tinto, Xstrata and Lonmin are not far behind.

Among the food producers, ongoing speculation about potential bidders for Cadbury drove a rise of 1.4% in their share price, with Nestlé, Kraft and Hershey’s all reported to be weighing up takeover offers.

With no end in sight for the Dollar’s slump, gold’s success looks set to continue pushing the FTSE towards the psychological 5500 barrier.

However, it will be interesting to see how the market responds to the announcement of Northumbrian Water’s interim results today, which are expected to be less-than-encouraging.

Falling utility company share prices may be widespread as a result – particularly as investors are already nervous about Ofwat’s release of their final report into pricing structures later this week – but it is difficult to predict whether this will have any serious impact on the FTSE when set against the exceptional performance of the mining sector.

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 mid-morning trading, shares have made a quiet but positive start to the day.

After the steep slides seen on Thursday that pushed the FTSE 100 back below 5300, it is not surprising to see some bargain hunters being tempted out.

The recovery so far today has been a gradual one – with little on the economic calendar traders may be reluctant to open up too many new positions on a Friday, preferring to wait for the start of a fresh week before re-entering the fray.

The UK index has been well underpinned by the 5200/5250 area in the past ten days, so there seems little reason to get overly negative while the market holds above here.

There is always the nagging worry that shares have got ahead of the economic recovery – but that was just as valid back in the summer for example and it did not stop the rally.

Sentiment towards shares still seems positive and yesterday’s shakeout hasn’t changed that.

Looking ahead to the US open we are expecting the Dow Jones index to start off a little weaker but only by about ten points.

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.

The FTSE 100 opened slightly lower than expected this morning, maintaining the gradual slide away from the year-high seen on Tuesday.

The effects of the mining sector’s volatility continued to be felt, with 9 out of the ten biggest losers coming from that industry.

Despite a reported 26% drop in profit, SABMiller’s share price rose by 2.35%, perhaps driven by the promise of positive results to come in the second half of the financial year.

News of a deal with Colgate-Palmolive saw Reckitt Benckiser’s stock rise 2.6%, and in the banking sector the share price of both Lloyds and RBS increased marginally after new regulatory powers were proposed in the US yesterday.

It will be interesting to see how the market responds to today’s announcement of UK mortgage and public finance data – both of which will serve as indicators of the progress being made in terms of economic recovery.

Any positive news for the housing market may in turn be reflected in an increased risk-appetite for equities. In the US, the country’s fourth biggest retailer Sears Holdings will report results.

These results – when combined with the UK October retail sales figures released this morning – will provide a good indicator for investors of how the retail sector is faring on both sides of the Atlantic.

Investors will be particularly interested in the sector in the run-up to the festive season; retailers will soon be finding out whether consumers are willing to reach for their credit cards or whether post-recessionary fears will prevail.

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.

The FTSE is struggling for momentum early on in London trading – hovering just above its opening level.

The UK market is being underpinned by mining stocks this morning, with Xstrata, Lonmin and Fresnillo all up between 2.9% and 4% by 10am in London.

Chocolate maker Cadbury was also up this morning as the prospect of a bidding-war loomed, with Hershey and Ferrero emerging as potential partners to see off Kraft Foods.

Gold prices continued to shoot upward today, with the yellow metal reaching a fresh record-high at $1146.95 an ounce.

The main concern for investors at this stage is that the currently lucrative carry trade – in which people are taking advantage of low rates on the Dollar to invest in equities – might blow up and send equities downhill.

Dollar weakness is also keeping commodities at decent levels, so a sharp rally may have the further knock-on effect of pushing down the heavily-weighted mining and energy sectors on the FTSE.

However, the recent year-highs for equity markets will have bolstered confidence, and while momentum has been in short supply so far today, this looks to be a consolidation rather than another major correction.

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.

In early morning trading, UK shares are slightly lower following yesterday’s move to 14 month highs by the FTSE 100.

Maybe not surprisingly, shares are under a little pressure this morning following yesterday’s strong gains.

Some weakness in the mining sector – which was the main catalyst for Monday’s early surge – is weighing on the index, but at the moment traders seem happy to use this sell-off as an opportunity to top up their holdings.

The main economic news for the UK so far has been the inflation figure. Although this came in slightly higher than expected, at 1.5%, it has had minimal effect on markets and still seems to be a long way away from being a concern once again.

Looking ahead to the US open, at the moment we are expecting a slightly weaker start to trading on Wall Street, but only by around 15 points lower on the Dow.

Inflation is also the big announcement over the pond today and it would take a number much worse than the 0.1% expected to knock investors renewed enthusiasm for stocks.

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.