Posts from — March 2010

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

In early trading the FTSE is slightly up on the day, reaching 5686 by 9.30am in London.

Today’s strength is linked in the main part to yesterday’s sprint finish for the Dow Jones, which saw US equities rocket towards the 10900 level.

On the FTSE, Thomas Cook is leading the pack, up 3% in morning trading after an upward revision of its price target from broker HSBC.

Overall though the markets have a slightly directionless feel so far. Many investors are waiting until the finer points of Alistair Darling’s Budget are revealed in the early afternoon before taking a view one way or the other.

In terms of the Budget, the item of most interest for equity investors is likely to be the Chancellor’s attitude towards banks, one of the FTSE’s largest constituent sectors.

While there has been much populist barking in order to shore up political capital during the run-up to the election, Darling’s bite may well prove altogether less impressive.

That said, if fiscal reprimands go much beyond rhetoric and the global bank levy, the implications of which the markets have already had plenty of time to absorb, we may see something of a sell-off in the sector.

And given that markets already feel at bursting point after the impressive March rally, it wouldn’t be altogether surprising to see a minor jolt downwards turn into a slightly wider-scale sell-off, with investors booking their profits.

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 continuing to push out to fresh 21-month highs as traders digest earnings news and inflation data.

Blue chip stocks remain in favour despite some lacklustre corporate news this morning.

The FTSE 100’s biggest gainer so far is Cairn Energy, up almost 9% on the back of a positive outlook over the company’s Indian operations.

Traders seem to be taking the significant fall in profitability for the year comfortably in their stride.

We’ve also seen bumper earnings from L&G with cost-cutting plans playing out well for the business.

All this has combined to leave the FTSE 100 eyeing a test on the 5700 level for the first time since June 2008.

The other big news this morning has been UK inflation data, which showed a sharper-than-expected decline.

This could give some cause for concern, not least because this also incorporates the recent jump in VAT as well as the forecasted easing of oil prices as we move into the summer.

Although the inflationary spike was widely accepted as a consequence of coming out of the recession, the bigger concern will be if price growth slows too quickly, as this could increase the risk of the economy taking a second hit.

Sterling is looking slightly softer as a result, but expect more influence to be seen here off the back of tomorrow’s budget.

There’s not much due out of the US this afternoon but Wall Street is looking a little stronger at the moment too with the Dow forecasted to open up around 24 points at 10,810, the bull market is still with us.

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.

Equities have started the week moving lower, with the FTSE 100 Index now testing that 5600 level.

With little economic data to work on, equities have instead taken their lead from Friday’s bout of profit taking on Wall Street, as traders await fundamentals later in the week.

Progress of Obama’s healthcare reform in the US has done little to damage the outlook for sector stocks, with both GlaxoSmithKline and AstraZeneca outperforming the broader index.

British Airways’ share price is also holding up relatively well as the strike enters its third day, although a sustained break below 240p could pave the way for further weakness here.

There’s not much due out as the session progresses, although tomorrow’s UK inflation readings and the budget on Wednesday should ensure that any lack of meaningful direction proves to be relatively short lived.

Wall Street is however pointing towards a lower start, with the Dow currently at 10,681 which is marginally below the intra-day lows for Friday

Having said that, it’s worth remembering the fact that we did see eight consecutive up days over the last two weeks, so some kind of adjustment – especially given concern over mounting debt in developed economies – was always looking imminent.

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 London index has made a solid start to the week’s final session although further volatility may still be seen.

The FTSE is continuing to rally. The 100 Index is taking its lead from yesterday’s upbeat session on Wall Street and holding clear of those highs from late August 2008 as a result.

However there’s little in the way of economic or corporate data around for traders to work on. As a result the quarterly options expiries we have today could take on added significance.

The London activity has passed with a positive impact and we still have Frankfurt and New York to come.

With equities remaining toppy, any overt volatility here could translate into a bigger sell-off.

There is no shortage of traders out there right now who believe markets are due for a correction and with signals such as the Dow having posted a bumper eight consecutive days of gains, it’s certainly difficult to dismiss these suggestions.

A bullish statement from Lloyds Banking Group regarding a speedy return to profitability is helping drive renewed confidence in the banking sector this morning while other heavyweight stocks are making only limited progress.

With Wall Street showing a broadly flat start to the day we could now be in for a rather nervous wait.

For many it’s becoming increasingly difficult to believe that equity prices can be sustained at these levels rather than some meaningful profit-taking transpiring.

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 trading the UK’s leading index is trading just below yesterday’s close at 5637 (10am London time).

It appears that an element of profit taking has overcome investors this morning as the previously buoyant mining and bank sectors have found themselves raided.

Bankers RBS (-2.48%), Lloyds Banking Group (-1.38%) and Barclays (-1.67%) have all experienced the effects, while miners Eurasian (-1.78%) and Xstrata (-0.98%) both felt the pinch.

Among the early winners are pharmaceuticals which find themselves in demand as investors flock to defensive stocks.

GlaxoSmithKline leads the way, gaining around 33p (+2.74%) to 1258p, with rival AstraZeneca not far behind, up 30p (+1.05%) to trade at 2926p.

There was good news for the beleaguered British Airways, which has endured a pretty rotten time of late.

The UK flag carrier managed to claw back some of its share price which now stands at 243.50p (+1.12%).

This follows last night’s news that the airline will be able to increase the number of flights available during the three-day strike, as more staff volunteered to work during the period.

Investors generally seem content to bank recent gains for now and, with little movement in either direction.

All eyes will now turn to the US to see if markets there can continue the advancements made over the past few days.

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.