Choppy session sees trader’s bank profits ahead of non farm payrolls
City Index February 2, 2011 5:19 PM
<p>Trading was particularly choppy today with strong early gains building on another strong session yesterday, waning into the afternoon to leave indices largely flat on […]</p>
Trading was particularly choppy today with strong early gains building on another strong session yesterday, waning into the afternoon to leave indices largely flat on the day. The FTSE 100 however outperformed broader European indices today, with gains of 0.6% led chiefly by strength in banking and mining equities.
The trading day had started brightly with equities continuing to charge higher, building on Tuesday’s positive session and lifting the FTSE 100 back up above the psychologically important 6000 level. A better than expected rebound in UK construction activity last month was also welcomed by investors, encouraging them to take on additional risk in equities and metals.
However, the FTSE’s failure to break above the 6020 level turned equity markets slightly more choppy, with investors happy to bank profits after two days that have seen stock indices across Europe charge higher by almost 4% since Monday’s lows. We also have an intensive few days of economic data coming out both tomorrow and on Friday, including European Retail Sales and culminating the all-important non-farm payrolls and so naturally, investors are happy to take some risk off the table and secure some well earned profits.
There remain natural hesitations amongst investors who are keeping an eye on proceedings in Egypt. Whilst the news that President Mubarak will not run again appeared to calm investors in Europe, with news agencies now reporting violent clashes escalating in and around Tahir Square, the markets could turn sensitive again should the army start to intervene and neighbouring states become involved. And indeed the price of crude oil has increased today, matching those heightening sensitivities.
BATs Rises on Surprising Jump in Sales
British American Tobacco shares rose almost 6% on Wednesday after the tobacco firm announced a jump in sales, giving shareholders a late Christmas present. Much of the increase in sales was related to emerging market growth.
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