Financial Market Comments from Yusuf Heusen, Senior Sales Trader, IG Index.

Early trading on the FTSE hasn’t had much of an impact so far, with the UK index holding steady after last night’s trend-breaking dip.

The burst of confidence in the financial sector provoked by the European stress tests is continuing to buoy British bankers, with Lloyds, Barclays and RBS extending their positive run this morning.

In addition, the proposed financial reforms out of Basel, which had the markets flinching in anticipation, appear to be leaning more towards silk than sandpaper – a turn of events which has has poured soothing balm on bankers’ fears.

This morning’s other champions are once again the mining companies, as positive performance out of the Asian markets overnight lent commodities demand the usual upward swing.

Last night’s poor data out of the US, which led to the FTSE 100’s late slump, will no doubt have analysts on edge; and the twitchier bears could easily look at that dip as an opportunity to make the most of the month’s steady rise and seize profits before any potential backsliding kicks in.

Among those companies reporting today there are signs the exodus might already have begun, with engineering group Invensys seeing share prices fall 5.5% despite announcing improved expectations for the year off the back of a respectable Q1 performance.

British Gas owner Centrica saw a similar lack of confidence hit its share prices, even in the face of a six-month profit increase of 65%.

With no major economic data due out of the UK today, it’s worth watching the corporate reports and subsequent share movements to see whether the bears are strapping themselves into the FTSE’s ejector seat.

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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.

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