FTSE Trades Flat Amid Mining Strength and Cable and Wireless Weakness
Financial Market Comments from Anthony Grech, Head of Research, IG Index.
In mid morning trading there is little change to the FTSE 100, but telecoms companies are under pressure.
After disappointing numbers from IBM after the US close on Monday, we have seen a muted start to trading so far in London. Telecoms business Cable & Wireless Worldwide is the biggest mover of the day, down by 16% so far.
The company has said that it is already feeling the pinch of the new government’s public sector cuts which will impact on earnings.
This has also had a slight knock-on effect on BT Group but not to the same extent; when the dust settles investors may well see BT as the better bet due to its more diverse business.
Strength in the mining sector is helping to offset this pressure and the 5100 area is still managing to provide a floor under FTSE selling to tempt the value buyers back in.
Looking ahead to the US open we are expecting the Dow Jones to start off around 70 points lower.
Part of this is due to the disappointing numbers from IBM which seem to have set a new tone of caution ahead of another busy day for company announcements. Goldman Sachs, Apple and PepsiCo are just three of the big names updating the market today.
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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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