Lloyds and RBS Weaken Amid Concern Over Capital Raising
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UK Market Comment, 18 July 2011
Closing comments from Ben Critchley, Sales Trader, IG Index:
Equities have taken another beating as the new trading week gets underway.
We may have finished last week with some vague hope that the release of Eurozone bank stress test results would allow a more positive sentiment to return to the market, but this proved to be unfounded and equities have by and large spent today pushing lower once again.
Lloyds and RBS are notable decliners in London, both sitting around 5% lower amidst concerns of new capital having to be raised, whilst the ongoing risk of default in the Eurozone is also weighing.
A handful of stocks have, however, managed to find positive territory, with the two metals plays – Fresnillo and Randgold – both charging ahead supported by rising gold and silver prices, the former breaking above $1600/oz for the first time earlier today.
Scheduled economic news is looking relatively thin on the ground tomorrow with the German ZEW survey and US housing starts being amongst the highlights, but arguably investors will be looking more closely at the debt issues.
Obviously, any further deterioration in the Eurozone situation could end up weighing on the banking sector, but there’s arguably an even more pressing point to be made in the US where pressure is mounting to find a way to lift the debt ceiling.
The White House has set this Friday as its deadline for agreeing a deal, which itself has to be implemented by 2 August to avoid the prospect of the US going into default. The problems in the Eurozone may be worrying, but they are certainly pale in comparison to the prospect of US treasuries being in default.
How and where to spread bet on:
Lloyds, where to find free charts, live pricing, how to trade etc >> Lloyds Spread Betting
Randgold, where to find free charts, live pricing, how to trade etc >> Randgold Resources 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
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UK Market Comment, 15 July 2011
Closing comments from Yusuf Heusen, Sales Trader, IG Index:
Shares spread betting markets are sitting broadly lower heading into the weekend break, but the fact that the FTSE is still holding just above 5800 is noteworthy.
It may have been a somewhat choppy week for equities but the reality is that we could have been left with way more of a blood-bath.
The unthinkable prospect of the risk-free base of the global economy being downgraded has been mooted again by ratings agencies, we’ve seen a flurry of sovereign downgrades elsewhere and traders are going into the weekend break trying to shore themselves up for any fall-out from the Eurozone bank stress test results due for release just after the market close.
By and large the economic data this week hasn’t served up any favours either, although the unexpected drop in UK inflation is at least taking some pressure off the MPC.
Media reports suggest that we’ll see a sufficient number of banks failing stress tests to offer a degree of credibility to regulators, but the numbers should also disclose sovereign debt exposures so this could make for a turbulent start to trade next week.
The German ZEW survey, Bank of England meeting minutes, plus the continuation of Q2 earnings season across the Atlantic all stand to pitch in some modest direction next week, but so long as there’s this outlandish prospect of the US not honouring their debts prevails, then traders are likely to retain this cautious footing.
Combine that with the fact that the Eurozone debt crisis still has a long way to resolution and the less risky assets could well find further favour over the summer.
How and where to spread bet on:
FTSE, where to find free charts, live pricing, how to trade etc >> FTSE Spread Betting
Shares, where to find free charts, live pricing, how to trade etc >> Shares 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 8000 markets, narrow spreads, advanced charting,
24 hour spread betting ..." » read
IG Index review.
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'Lloyds and RBS Weaken Amid Concern Over Capital Raising' edited by AG, updated 18-Jul-11
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