Closing comments from David Jones, Chief Market Strategist, IG Index:
In a woeful day for equities, markets on both sides of the Atlantic are struggling to find cheer.
Ireland may have been at the forefront of traders’ minds at the close of yesterday’s session as acceptance of the bailout package paved the way for a bout of political instability. There’s now a general election on the cards, but it’s been the uncertainty in Asia that has seen traders taking flight in recent hours.
With the Thanksgiving holiday fast approaching, no one wants to be left on the wrong side of any sell-off when markets are closed, so the theme seems to be one of taking money off the table without too much hesitation. As a result, traders’ screens in London are a sea of red with only the occasional stock making it into positive territory.
The uncertainty is however boosting gold prices which have rallied close on $20 in recent hours, in turn lending some support with gold specialist Randgold Resources being one of the few stocks to shine. It’s perhaps also worth mentioning that Qantas’ decision to resume its A380 flights is lifting Rolls Royce too.
The current situation is also serving to influence currency markets with the dollar rallying on its safe-haven status whilst the Euro unwinds given those ongoing sovereign debt concerns. The EUR/USD pair has again posted a trading range in excess of 200 points on the day and is now trading at levels not seen in eight weeks.
There’s a slew of economic news out of the US tomorrow - including durable goods and Michigan sentiment - so this may be able to provide some support, but as we’ve already seen, the upward revision in US GDP squarely failed to prop up equities across the Atlantic.
There’s also UK GDP and the German IFO sentiment readings due in the morning, but for now Seoul’s response to Pyongyang looks set to be the main concern.
How and where to spread bet on:
Gold, where to find free charts, live pricing, how to trade etc >> Gold Spread Betting EUR/USD, where to find free charts, live pricing, how to trade etc >> EUR/USD Spread Betting
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.
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UK Market Comment, 22 November 2010
Closing comments from David Jones, Chief Market Strategist, IG Index:
The welcome news about the Irish Bailout has well and truly subsided into worries over UK banks’ exposure to the problem. After a half-hearted attempt to save the day around 3pm, the FTSE 100 is continuing to struggle around the 5680 level, off around 50 points on the day.
Part Nationalised banks Lloyds and RBS are the big casualties of this renewed worry. Both have lost 4% today as the UK financial press has highlighted the depth of the banking industry’s exposure to Ireland.
RBS has a risk worth a dizzying 113% of the company’s total net asset value, with Lloyds at 61%.
France’s Credit Agricole pips them with a figure of 123%, and is one of many European banks joining in today’s sell off, down 3.5%.
Worries over stability in the Emerald Isle are being compounded as the bailout becomes more and more political by the day, with the opposition party Fine Gael calling for a snap general election, citing public distrust over the handling of the crisis.
The risk of contagion still lingers over European markets, with traders now eyeing up the next sacrificial lamb.
Spanish and Italian markets are down more than 2% with Portugal faring better, down just over 1%. A 1.3% fall in the Dow Jones EuroStoxx 50 index helps highlight a broad sell off, as its coverage of major blue chips from within the EMU shows it is outselling the benchmark British and German indices.
The lack of economic data and major corporate announcements today has meant a quiet, yet negative start to the holiday week for US markets.
Tech markets will no doubt eye the HP figures out after the bell, but macro-economic followers will have to wait for tomorrow’s second reading of Q3 US GDP and then Wednesday’s UK equivalent for something more meaty. US Trading is likely to remain thinner than normal in the meantime, as the turkeys are prepared for Thanksgiving dinner, and the other PIGS nations try to avoid the same fate.
How and where to spread bet on:
FTSE, where to find free charts, live pricing, how to trade etc >> FTSE Spread Betting RBS, where to find free charts, live pricing, how to trade etc >> RBS Spread Betting
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 >>
"With IG Index you get all the normal advantages of Spread Betting plus..." >> read
IG Index review.
Risk Warning: Financial Spread Trading and CFDs carry a high level of risk to your capital. You may lose more than your initial investment. They 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.
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UK Market Trading, updated 23-May-12
The Late Trading Update - A quick look at the markets as they close with insight from one of the leading Spread Betting Companies...read article: UK Market Trading.
UK Market Spread Trading, updated 18-May-12
Free spread betting market updates - A daily look at the spread betting markets as they close with views and opinion from one of the leading Spread Trading Companies...read article: UK Market Spread Trading.
Index of UK financial market trading articles - the regular closing market comments from IG Index...see Index.
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