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FTSE Rises as EU Looks Set to Cut Budget

European markets are trying to close the week on a positive note but, with closing statements from the two-day EU economic summit still to come, there is still ample opportunity for a reversal of sentiment.

At 10am (London time) the FTSE spread betting market is up 21 points at 6250.

After a marathon session of haggling, it looks like the UK and Germany’s stance has held sway, with the EU looking set to cut its budget rather than increase it.

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With so many of its member states embarking on aggressive austerity measures this ought to be well received by the general public.

Controversy still clouds the Spanish government and the ramifications are easily seen as their government bond borrowing costs continue to float around the 5.4% level.

In the UK, politicians are now pushing for criminal investigations into the ‘horse gate’ fiasco and it will be interesting to see which of the UK’s food retailers manage this potential PR minefield most successfully.

On the equity front, Cable & Wireless Communications‘ revenues are on course to meet expectations, with annual returns likely to be similar to 2011′s performance.

In M&A activity, Severn Trent, the UK utilities firm, is stripping off its analytical arm and selling it to ALS.

Following last night’s encouraging Chinese economic data, out just before the Chinese New Year on Sunday, the mining sector is helping to prop up the FTSE.

Looking ahead to the US open, the Dow is currently being called to open flat at 13,944.

 

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Financial Market Comments from Alastair McCaig, Market Analyst, IG Index.

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.

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