Widespread Profit Taking Lowers FTSE: Financial Spread Betting Update
Financial Market Comments from Tim Hughes, Head of Sales Trading, IG Index.
In early trading the FTSE is down more than 1.8%, with just half a dozen stocks posting gains so far.
Yesterday’s increase has been more than wiped out already this morning as the insurance sector, banks and mining stocks are all struggling.
Legal & General bore the brunt of a downbeat assessment of the FTSE’s insurance sector by Citigroup; the broker predicted that the current trend of increasing levels of poor quality capital in the sector might attract stricter regulation.
The other major drag on the UK index is widespread profit taking by investors in the mining sector – Kazakhmys and Antofagasta were down 4.48% and 4.38% respectively by 10am in London.
Rather than demonstrating a serious lack of fundamentals, today’s dramatic tumble can be attributed partly to investors taking money off the table in the run-up to the festive period.
While markets don’t look set to go into quite the freefall that a loss of almost 2% might indicate, we can probably expect a continued hesitancy over equities until the new year, as traders assess risks and plan longer-term strategies for when the markets are back in full swing.
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 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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