Financial Market Comments from Anthony Grech, Head of Research, IG Index.

The UK 100 Index is struggling for momentum this morning, down by around eight points at 9.45am, but it has pared earlier losses.

Last night’s comments from Ben Bernanke, in which he called the outlook for the US economy “unusually uncertain”, have clobbered sentiment on both sides of the Atlantic.

Poor corporate earnings have compounded this macroeconomic misery, with Autonomy, Imperial Tobacco and Kingfisher all performing below analysts’ expectations.

New kid on the block, Ocado, is also struggling ahead of the start of full trading for the share next Monday. Our price is still showing that the loss-making retailer is under pressure, trading at around 160p, a fall of 4% today.

Nevertheless, there was a glimmer of hope for investors, with Capita reporting strong demand across the public and private sectors and shooting to the top of the leader board after a 15% rise in interim profits.

While we may see a small, short-term bounce after the significant selling pressure of the past six trading days, traders will need to be convinced that the rally has legs before ploughing a significant amount of cash into risk assets.

Instead, investors may be wondering how long the UK Index can resist succumbing to the economic uncertainty outlined by the Fed’s chairman last night. His comments poured cold water over US equities and any further signs of weakness in the US economy will undoubtedly have a knock-on effect for UK shares.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

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.