Financial Market Comments from Tim Hughes, Head of Sales Trading, IG Index.

The FTSE opened on a positive note this morning, with miners again leading the charge on the back of rising metal prices.

Despite a negative close on Wall Street last night, the FTSE started trading strongly today.

The end of the Dollar’s brief rally saw traders once more looking for safer alternatives – namely gold – and Randgold were the big winners, up 155p to 5195p, with Lonmin and Kazakhmys also doing well.

Elsewhere, the miners’ dominance was challenged by the world’s biggest catering company, Compass Group, after they reported full-year pre-tax profits were up 33% and saw their share price rise accordingly.

In the banking sector, Lloyds continued to rise after optimism about the successful take-up of their rights issue.

The big news today is the release of revised UK GDP data. The latest reading shows that the UK economy has contracted by 0.3% in Q3 – better than the preliminary reading of 0.4% last month, but still making this recession the longest in the UK since records began.

It is difficult to anticipate exactly how traders will respond to the news, with some in the City putting a positive spin on the story while others see it as having serious implications for the future.

Certainly the Pound will take a hit on the forex – it’s already struggling against the weakened Dollar and the Euro after the announcement – and we may see investors moving away from the currency market in their droves.

Whether this will mean even more gains for the all-conquering miners should become clear over the next few hours.

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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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