FTSE Spread Betting Markets Rally After Strong US Data and Reports
Financial Market Comments from Yusuf Heusen, Senior Sales Trader, IG Index.
The FTSE 100 has started the day with a sharp rise, pushing its recent rally into a third day.
Strong profits from US bank State Street, together with reassuring US retail data, seem to have been the main drivers of a positive performance from Wall Street which has spilled over into global markets, including the UK.
State Street’s optimistic outlook in particular has steadied UK banks, as has a fresh burst of confidence that the forthcoming European stress tests might not be so great a threat as originally feared.
Ahead of the Bank of England’s interest rate decision, due at midday, the banks look to be in a comfortable position for the first time in quite a while.
While the banks are showing green shoots, the FTSE’s big miners are also blooming in morning trading with Xstrata up 3.31% at 10:00 (London time) as one of the index’s biggest winners.
The FTSE’s leader this morning is the generator company Aggreko, pushing up 3.91% after receiving a strong ‘overweight’ rating from HSBC. However, it might not be time to break out the party hats just yet.
Despite saying the global economy was recovering faster than expected, this morning the International Monetary Fund cut its growth forecasts for the UK from 1.3% to 1.2% (for 2010) and from 2.5% to 2.1% (for 2011).
This undercuts the Office for Budget Responsibility’s own predictions in the face of the coalition government’s plans for massive public spending cuts.
Fears now will be that the IMF’s sobering warning could be enough to shake investors’ fragile confidence and undo all the good work of the last 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 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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