The regular monthly spread trading review from IG Index.
IG Index FTSE Trading - July 08
"FTSE 100 slips to three-year lows"
The weakness that plagued the market through June continued into July. By 16 July the UK blue-chip index had lost more than 1200 points in less than two months.
And it was the same old pressures that were driving the market lower: ongoing negative news about the wider economic outlook; continued pressure on the banking sector; and a gloomy outlook from retailers such as Marks and Spencer.
The second half of July saw a significant bounce-back, with the FTSE 100 up around the 5400 level. The big question in the weeks to come is whether this is the start of a more meaningful recovery by the market – or just another dead-cat bounce before the index slips to fresh lows.
(IG Index price data: compiled 4 August 2008)
IG Index Banking Sector
"Banking sector still under the cosh"
It's almost a year since the news about Northern Rock broke and since then, the banking sector has seldom been out of the headlines. July was no different as the share prices of high-street banks continued to plunge with Barclays, RBS, and Lloyds TSB seeing sizeable daily declines and slipping back to levels not seen for many years.
The HBOS rights issue also came into focus in July. This had been set at 275p per share when the price of HBOS had been much higher. With the price slipping, this became an unattractive offer for shareholders with less than 10% taking up the rights. HBOS then rounded off the month by reporting that profits in the first six months of its financial year had dropped by 70%, when compared to the same period last year.
(IG Index price data: compiled 4 August 2008)
IG Index FX Markets
"Oil suffers biggest decline for more than a year"
The price of crude oil this year has perhaps lulled some traders into thinking it was a 'one-way' bet which could only go up. By the middle of July the price of 'black gold' was up by a good 45% for the year to date, trading just above the $147 per barrel mark.
But then the price began a decline that saw it trade down towards $120 by the end of the month. There were worries that the price and global economical slowdown would result in reduced demand, particularly from Asia and the US.
The end of July saw oil trade back to levels not seen since early May. Whether this turns out to be the first sign of the oil bull market starting to stall remains to be seen, but because of oil's influence across a whole range of markets and economies it's always worthwhile keeping an eye on
(IG Index price data: compiled 4 August 2008)
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
IG Index provides an execution-only service. The material above does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. IG Index accepts no responsibility for any use that may be made of these comments and for any consequences that result.
Risk Warning: 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.
'IG Index Review of July' by IG Index, updated 07-Aug-08
For related pages also see:
IG Index Review of November, updated 15-Dec-08
While the FTSE 100 managed to hold above its earlier lows, this was not the case for the S&P 500. During November, the broader US index slipped back to...read article. IG Index Review of October, updated 10-Nov-08
The last few months have seen the banking sector in the limelight as the sub-prime drama continued to unfold. But a major casualty of the recent slowdown has been the mining sector which is...read article. IG Index Review of September, updated 09-Oct-08
When the US first announced a $700 billion bail-out of the financial sector, the indices staged significant rallies. But when the initial vote on 29 September failed to pass the bill, the Dow Jones recorded its biggest...read article. IG Index Review of August, updated 10-Sep-08
The strength of the US dollar took its toll on the price of gold. Back in March we saw all-time highs for the yellow metal but since then it has not had the same sort of momentum. In August the price broke below the $850 support level and eventually traded down to ...read article. IG Index Review of July, updated 07-Aug-08
The second half of July saw a significant bounce-back, with the FTSE 100 up around the 5400 level. The big question in the weeks to come is whether...read article. IG Index Review of June, updated 06-Jul-08
The second half of May saw weakness creeping into the UK blue-chip index and this really gathered momentum in June. Although there were brief signs of strength throughout the month, the FTSE 100 still lost more than 400 points and dropped back to levels not seen since...read article. IG Index Markets May, updated 09-Jun-08
The price of oil is seldom out of the news for long and last month was no exception. May saw the multi-year trend for crude oil continue, with the July contract pushing out to $135 a barrel. That is a 35% gain for this year already and more than double...read article. IG Index Markets April, updated 07-May-08
US dollar weakness, particularly against the euro, is another trend that has been clear for some time. The EUR/USD hit a fresh high in April, albeit briefly, with the currency pair poking above the $1.6000 level for the...read article. IG Index Markets March, updated 04-Apr-08
After a period of sideways trading in February, the bearish sentiment returned to the UK stock market in March. By the end of the month, the FTSE 100 was down by more than 11% for the year to date. The worst start to a year since the...read article. IG Index Markets, updated 04-Mar-08
Monthly Review: For much of the month, the 6000 level proved to be a ceiling for the index with successive rallies into this zone bringing the sellers back out. Over the last week, the FTSE staged more of a decisive push through here but we go into March with many still wondering if there is a more sustainable rally to come. Or is this just a...read article. IG Index Spread Betting Markets, updated 01-Feb-08
Monthly Review: Where next for the major world stock markets? During January, the FTSE 100 traded back to levels not seen since October 2005. This has left many concerned that this kind of a decline is not a healthy correction but a sign of things to come. Going into February, the market has regained the 6000 level but it is probably fair to say that ...read article.
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more! All Free - Click here!
Risk Warning: Spread betting carries a high level of risk to your capital and 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.
* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.
