Financial Market Comments from Will Hedden, Sales Trader, IG Index.
The FTSE beat an early retreat this morning, but by mid-morning the index had recovered somewhat and is trading back around the 5700 level.
Miners weighed on London’s blue chips at the opening bell, with both BHP Billiton and Rio Tinto losing ground on word that they had abandoned a joint venture deal.
The proposed deal had met with concern from Europe and Asia about the impact such a venture would have on competition, and the changes demanded by regulators had ultimately proved unacceptable to both parties, despite the huge savings that had been estimated.
Mining peers Antofagasta and Vedanta also lost out as HSBC lowered its recommendations for both. In addition, falling copper prices compounded miners’ worries and ensured the unlikely situation that at 10.45am (London time) miners occupied the bottom eleven spots on the index leader board.
By mid-morning, however, gains from the likes of Man Group and Lloyds had pared the FTSE’s early losses and the index was back at around its opening level, down only by the slightest of margins (-0.06%).
After bursting through 5750 temporarily last week, and the subsequent sell-off on Thursday and Friday, it will be interesting to see whether the FTSE 100 spread betting market can sustain the strong sentiment seen recently. This is especially true with the all-important spending review in store midweek.
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