Financial Market Comments from Philip Gillett, Sales Trader, IG Index.

During morning trading in London, investors seem to have taken the foot off the pedal somewhat after yesterday’s impressive rally – and at 10am the FTSE is sitting slightly below its opening level.

The UK’s leading index initially looked set to carry over some of yesterday’s momentum and jumped almost 20 points, with investors sensing there was enough positive economic chatter to justify further exposure to equities.

A prospective merger between BA and Iberia sent the former’s share price up 3.5%. In the current climate, the benefit of such news will stretch beyond the individual companies in question.

Even the suggestion that M&A deals are back on the cards will provide the market with a more general boost.

Today’s other success-story so far has been BT, which was also up 3.5% after raising its full-year revenue outlook and dividend forecast.

However, there was some weakness for the mining sector after yesterday’s rally, which was based on rising metal prices, has come to an end.

Today’s hesitation among UK investors was almost inevitable after the Dow Jones’s comparatively lacklustre finish yesterday saw it end well off its intraday high.

Investors will be taking a breather and allowing themselves a period of consolidation before targeting fresh highs – in the short-term, the level to crack will be around the 5350 mark.

Nevertheless, the economic fundamentals seem to be in place, with upbeat data continuing to provide a platform from which to target new year-highs for equity markets.

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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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