Financial Market Comments from Tim Hughes, Head of Sales Trading, IG Index.
In early trading the FTSE 100 is around 40 points up on the day.
We’ve seen some gentle but fairly broad-based strength this morning, with the resources sector leading the market higher on the first day of the second quarter.
Big name miner, Rio Tinto, saw a 1.84% increase in value after reaching an agreement with the Mongolian government which will allow the company to develop copper reserves in the country.
Sector mates Eurasian Natural, Randgold Resources and Anglo American were also all up between 1.7% and 2.6%, with Xstrata leading the pack up just over 3% on the day.
With trading volumes likely to wind down in the run-up to the Easter break, we may see the market amble, rather than sprint, towards the finish line this afternoon.
Nevertheless, traders will be watching today’s US Challenger job-cut report, not to mention tomorrow’s Non-farm payroll announcement, with keen interest.
Solid figures here would draw a neat line under an impressive first quarter. In contrast, a worse-than-expected number may shake sentiment and we could see some profit-taking if investors feel the need to take money off the table and wait for the second quarter to start in earnest after the break.
In the longer term, investors will be aware that we’ve seen the best start to a year since 2006. If the market is going to extend these gains, we will most likely need to see some serious, positive fundamental data to cement upbeat sentiment.
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