Equity markets remain positive amid investor optimism (3pm GMT)
City Index February 7, 2011 8:59 PM
<p>Strong commodity prices were enough to drive FTSE up for a fourth session in five trading days. With copper trading at record highs above $463, mining equities […]</p>
Strong commodity prices were enough to drive FTSE up for a fourth session in five trading days. With copper trading at record highs above $463, mining equities added to Fridays gains, pushing the FTSE up some 40 points.
Randgold Resources was the stand out miner, adding 2% after posting solid results and raising its dividend forecast. Xstrata managed 3 % gains as Citigroup increased their price target and confirmed its buy rating, whilst Nomura flagged the miner as a top buy alongside Anglo American.
Outside of the mining sector, Arm holdings took centre stage once again as Numis upgraded the Tech Hardware giant, posting a 660p price target. Arm Holding investors have been handsomely rewarded in recent months, and the rally seems to show no signs of abating just yet. The outlook for the UK chip designer remains positive enough that investors were keen to add to positions rather than crystallize profits.
With a lack of macro data emerging at least until later in the week, it is likely that the market will remain in its current upward trend with nothing of note in investors headlights to hamper appetite for risk. Investors remain confident of prospects for global equities, so much so that poor US employment data on Friday was shrugged off with ease as the Dow closed on 18 month highs.
With investors adopting a ‘no news is good news’ mantra there is little reason to see any reversal in the short term.
Whilst in the UK traders will be mindful of the Bank of England rate decision later in the week, the decision is unlikely to herald any surprises. That said, traders are showing signs of increasing belief that a rise could come this side of the summer. As the prospect of a rate rise intensifies buyers of sterling are pushing the currency toward important resistance levels that if breached could see the pound posting highs not seen since late 2009.
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