FTSE Struggles for Direction as Resources Are Up But Banks Are Down
Financial Market Comments from Tim Hughes, Head of Sales Trading, IG Index.
The FTSE is torn this morning, being pulled one way by rising resource companies and another by struggling bankers.
Vedanta, Lonmin and Kazakhmys were all up in early trading. Conversely, RBS, Barclays and Lloyds were propping up the bottom of the table, leaving the FTSE relatively flat on the day.
Resource companies were boosted by news that the recent gold rush is showing no sign of slowing down. The yellow metal broke through yet another major barrier yesterday evening, striking $1201.63 an ounce on the London Bullion Market.
In manufacturing news, GM announced on Tuesday that Fritz Henderson, chief executive at the US car giant since only March 2009, would be stepping down. GM admitted that ‘changes needed to be made’.
With index leaders split for the moment, the FTSE seems to be searching for direction. This despite UBS forecasting a strong 2010 for the UK’s leading index.
UBS equity strategists said yesterday that the FTSE 100 may rally as much as 18% by the end of next year. This would bring it back up towards 6250, a level last seen in the first half of 2008.
In the US, meanwhile, better-than-expected housing and construction data took dealers’ minds off Dubai, and the Dow closed 1.2% up on the day.
Disappointing November manufacturing figures, however, seem to have tempered enthusiasm in the UK. It will be interesting to see whether the positive sentiment on the far side of the Atlantic filters across to London.
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.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.
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