European Indices mixed as trader’s gauge Portuguese bond auction and Libya

<p>European Indices were mixed on Wednesday with the FTSE 100 Index lower by 0.4%, after a number of companies went ex dividend, whilst theDAX posted gains of 0.3%. […]</p>

European Indices were mixed on Wednesday with the FTSE 100 Index lower by 0.4%, after a number of companies went ex dividend, whilst theDAX posted gains of 0.3%.

The theme of the morning however has been traders maintaining an eye on the price of crude oil and the Portuguese bond auction. Traders continue to trade sensitively to any increase in the price of crude oil whilst the Portuguese bond auction is another opportunity for the market to gauge investor confidence in the indebted country.

The Portuguese bond auctioned passed through the morning session with equities reacting with little difference, though the risks were mostly weighted to the downside should the demand not have been as high as hoped, which was not the case.

We are still stuck in a trading range in the FTSE and broader European indices, something that is unlikely to change until investors are confident enough of no more spikes in the price of crude oil.

On the upside, shares in Rolls Royce were lifted 3% after the firm launched a joint bid with Daimler for engine make Tognum with investors bullish about CEO’s John Rose’s confidence that the deal could help drive top line growth.

Shares in Prudential led the FTSE 100 leader board, gaining 4.4%, after the insurer gave shareholders something to cheer about with their earnings beating market expectations and also hiked their dividend more than investors were expecting. The insurer has outperformed what the market had predicted on both accounts of profits and dividends and so naturally we have seen an increase in demand for the company’s shares today.

On the downside was British American Tobacco whose shares fell 3% largely on the back of its share price going ex dividend rather than any negative sentiment impacting share prices today.

Tullow Oil shares also traded into negative territory after the oil explorer missed profit forecasts. The firm reported a 361% jump in profits to $152m for last year but this fell drastically short of the market consensus of $192m. The company also left shareholders no closer to understanding when a resolution may come from the long running Ugandan tax dispute and approval for a new oil development in the country with Total and CNOOC.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.