Equity markets start the day in subdued fashion

<p>  Equity markets across Europe started the day in subdued fashion following yesterdays day of ‘levelling’ out. The FTSE closed up +113 points last night following Monday’s […]</p>


Equity markets across Europe started the day in subdued fashion following yesterdays day of ‘levelling’ out. The FTSE closed up +113 points last night following Monday’s bank holiday in the UK. Impressive as this move appeared it was more a case of the UK playing catch up with its European and US counterparts, who were not afforded the luxury of ‘extended’ public holidays over the festive season.

Back to today, European equity markets are weaker this morning with theFTSE 100 down -15 points at 5999, the DAX down -79.5 points at 6895 and the CAC 40 down -36 points at 3879. Most analysts are championing Equity markets this new year and are predicting theFTSE to touch 6700 at some point in 2011. Some are even mentioning the 7000 level, meaning a break of the dot-com bubble high which peaked at 6950.6 on the last trading day of 1999.

Moves of note this morning include ARM Holdings, who produce chips for smart phones including the iPhone, up +7.5p (+1.7%) to 445.4p following reports of them being a takeover target, with Intel Corp being muted as the potential purchaser.

Next, the UK retailer, hit a high of 2066p early this morning following a well received trading update. The numbers were better than expected but contained a tinge of caution as the outlook for 2011 looks ‘uncertain.’

HMV, another UK retailer, today issued a profit warning and was trading -7.25p lower (-22.3%) at 25.25p. The music retailer and owner of Waterstone’s bookstores cited poor weather conditions in the UK and “weak” entertainment markets for the revised outlook. It also confirmed it will be closing 60 stores across the UK in 2011 and is hoping to cut costs by £10m a year.

Taylor Wimpey, the UK listed homebuilder, is currently considering selling its US homebuilding subsidiary Taylor Morrison. Reuters reported that a private US builder has made a bid. The news buoyed investors this morning and Taylor Wimpey traded up 1.05p (+3.1%) to 33.12p.

Looking ahead to this afternoons session we have MBA Mortgage Applications out at 12pm (GMT) and ADP Employment Data out at 1.30pm (GMT). Hopefully our friends across the pond will give us some guidance and spark us into life for the new year. With the FTSE seemingly magnetised to the 6000 level it seems that a move of conviction is not forthcoming in the short term. However, US Non-Farm Payrolls out on Friday may well be the spark that lights the fuse to the new year!

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