European indices mixed in light volume Philly Fed misses

European indices were mixed going into the close on Thursday with the FTSE 100 trading with small losses of 0.1% whilst the DAX and CAC both posted gains of around 0.5%. In truth, the FTSE 100 Index would have traded much better were it not for weakness in heavyweight Vodafone, whose shares slumped over 3% in reaction to worse than expected profit margins at Verizon Wireless, the telecom giants’ joint venture.

Today’s trading session has the feel of the city of London packing its bags for various trips around the country and abroad ahead of four bank holidays in close succession rather than investors stock picking. Still, we can gain confidence from the fact that despite yesterdays strong gains, investors have not shown a willingness to cash in their gains ahead of an expected leave of absence from the markets.

Trading has been somewhat quiet today and the lower volumes in the market expected over the coming trading sessions could add a dose of volatility to Indices next week and cloud true market sentiment a little.

Company earnings continues to support equity markets and added to Apple’s forecast smashing earnings last night, we have Morgan Stanley and General Electric both pleasing shareholders today to trigger further stock gains.

Closer to home in London, shares of Autonomy have raced straight to the top of the FTSE 100 leader board after the firm reported forecast beating sales for the first quarter of $220m and said it saw a gentle but sustained recovery. The news has helped to lift the firms shares back above the £16 level.

However, a disappointing reading of the Philadelphia Fed Business Activity Index did put a dampener on sentiment for the afternoon, with the indicator badly missing forecasts of 37.0 to post 18.5 having seen business activity grow at its fastest pace for 27 years in March.

Next week company earnings continues in full flight with investors focusing on key firms in both the US and UK. Today we started to see investors place some speculative trades on Barclays, betting that the company may please shareholders when it reports earnings next week.

The FTSE 100 is nearing the top edge of its 2011 trading range and whilst the recent bounce is yet another indicator that there is buyer strength on any price dips, traders are awaiting a break out above the 6100 level to convince that the FTSE 100 can push on from these levels. In the meantime, the FTSE 100 range bound behaviour has facilitated more investors to swing trade the UK 100 Index between the upper and lower levels of its range.