Posts from — June 2010

Financial Market Comments from Anthony Grech, Head of Research, IG Index.

In early trading the FTSE is staging a minor bounce-back after yesterday’s slump, up 20 points so far.

However, this is at the moment a defensive rally; the gains seem to be the result of investors sensing that yesterday’s flight from risk was overdone rather than necessarily believing that the market is a clear buying opportunity at current levels.

Indeed, with the non-cyclical drug-making sector leading the upswing, we may well see momentum taper off as the FTSE meets greater levels of resistance around the 5000 mark.

As such, the final session of the second quarter looks set to finish with a whimper rather than a bang. And it has certainly been a tricky period for equities, with indices on both sides of the Atlantic at multiple-month lows.

Investors will be hoping that markets can shake off the fears surrounding recovery prospects.

The key area of debate will remain the differing strategies of the US and Europe in balancing economic recovery and the tightening of government purse strings.

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 and 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, Head of Research, IG Index.

In mid-morning trade, sharp falls in China have wiped nearly 2% off the FTSE 100.

The FTSE is back below 5000 as heavy falls in the mining sector weigh on performance.

Once again we are seeing the potential fragility of the economic recovery playing on the minds of investors.

Concern over reduced commodities demand from China and, on a wider scale, the effect global austerity plans will have on economic growth are prompting portfolio reshuffles as the outlook for the next few months remains a little uncertain.

With many of the UK-listed large mining stocks either at, or not too far away from, their 2010 lows we could be in for a test of investors’ mettle.

It remains to be seen whether they still view prices as a bargain at these levels or if the 18-month rise in the sector has factored in a too optimistic view of the pace of global recovery.

The US hasn’t avoided taking a hit in out of hours trading and at the moment we are expecting the Dow to start off around 110 points lower than yesterday’s close.

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 and 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, Head of Research, IG Index.

The FTSE is on a fairly even keel in early trading, up just a shade below 10 points by 9.15am.

The resource sector is currently leading the index slightly higher, with upbeat news from the G20 summit offsetting some of the negative sentiment surrounding wider economic recovery in both the US and the UK.

Banks were generally buoyant as news emerged that the implementation of new capital requirements is to be delayed, Barclays was up almost 1% whereas RBS shed 1.12%.

The news from the G20, combined with a finalised US financial regulation bill, may now help banking shares move beyond recent uncertainty and establish a solid base from which to target further gains.

As the year’s second quarter draws to a close, investors will be looking to tidy their portfolios ahead of company announcements and this may dictate market movement until the crucial Non Farm payroll figures from the US on Friday.

As such, we may well see markets tread water for the time being, with the FTSE continuing in a fairly narrow range around 5050-5150.

Any sustained rally will require a few consecutive pieces of positive data and for the G20 to continue the tricky balancing act of managing budget deficits while nurturing growth.

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 and 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, Head of Research, IG Index.

In mid-morning trading, an early gain for the FTSE has been eroded and once again blue chips are in decline.

After initially staging a short recovery led by the banks, shares in London have slipped lower.

The biggest loser on the day so far is once again BP, down by around 7%. Investors are still struggling to put a value on the company as the clean up in the Gulf goes on. The threat of a tropical storm hitting the area is yet another reason for the markets to give the shares a wide berth for now.

Some strength in banks is helping to stem the damage to the FTSE. Nevertheless, the combination of poor performance in the US last night, concerns about European debt re-emerging and the G8/G20 meeting over the next few days adding more uncertainty into the mix, there seems to be little to lift spirits today.

Looking ahead to the US open, at the moment we are expecting a slightly weaker start to the Dow Jones index, down around 10 points.

The third GDP estimate is due out ahead of the market open, with a figure of 3% widely expected here.

With little else on the calendar, it could well be a quiet finish to a poor week for UK shares.

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 and 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 trading today the FTSE 100 has struggled for momentum, despite a bright showing by high-street retailers.

Investors in the retail sector are hoping that next year’s increase in VAT may stimulate spending during the remainder of 2010.

This saw Morrisons and Tesco towards the top of the leader board so far today.

The mining sector is the other key focus for traders, after Julia Gillard replaced Kevin Rudd as the Australian prime minister.

The latter was a strong proponent of a ‘super tax’ on Australian mining projects, whereas the incoming prime minister has softened the tone and looks willing to negotiate the detail of the plan with industry leaders.

As a result, BHP Billiton ticked slightly higher in early trading today.

Despite the fact that negotiations are taking place thousands of miles from London, UK investors will be keeping a close eye on the progress of the political wrangling in Australia and how it is affecting the mining sector.

Given its tendency towards volatility and its heavy weighting on the FTSE, the mining sector is a key driver of momentum for the UK index.

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 and 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.