Financial Market Comments from Anthony Grech, Market Strategist, IG Index.

The FTSE is continuing to unwind after yesterday’s big sell-off, testing three-month lows in the process.

Markets clearly remain concerned as to the implications of the BoE’s suspension of QE, especially when taken alongside the bank’s cautionary note over UK economic growth in 2010.

As a result, traders are continuing to sell down equities ahead of the weekend break.

The faster-than-expected PPI rises will also be adding to the cautionary tone as again inflationary pressures will point towards rate hikes in due course.

This downward momentum is likely to be exaggerated by the fact the Dow Jones is now forecast to open below that psychologically significant 10,000 level.

With volatility only likely to increase further after the release of today’s non-farm payrolls, the risk of further selling cannot be underestimated.

There has however been the occasional glimpse of hope around today with the far better-than-expected interims from British Airways.

This news has tempered share price falls despite the fact the carrier still has to contend with the prospect of strike action from cabin crew.

Adding some more hope is an upbeat outlook from Compass which is helping the caterer gain ground.

There isn’t much else to cheer however, with BG Group missing expectations, punishing their share price as a result, while the banks are also struggling in general as risk aversion sees investors moving elsewhere.

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Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

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