European indices trade positively on Monday as banks gain

<p>The FTSE 100, DAX and CAC all posted gains in early trading as stocks recovered from initial weakness. We have seen investors come in to […]</p>

The FTSE 100, DAX and CAC all posted gains in early trading as stocks recovered from initial weakness. We have seen investors come in to buy stocks after a somewhat aggressive sell off in later trading in Friday.

There is a lack of economic data out today and so trading has been given a bit of a free reign. All three heavyweight sectors; miners, energy and banking stocks are higher today with the latter gaining the most and as such leading European indices higher.

However, gains were rather subdued in trading and investors clearly still trade with a fixated eye on developments in Libya – where fighting has intensified over the last few days – and any subsequent spikes in the price of crude oil. Both Nymex and Brent crude oil has rallied higher this morning on the escalating violence in Libya and traders remain sensitive to any significant price spikes in crude oil.

Individuals have been speculating about the situation in Libya potentially turning into a civil war and whilst the weekend’s battles have certainly already had the hallmarks of this, a fierce and prolonged civil war could have significant implications for the price of crude oil and equity markets alike.

One would dread to think the impact on the UK economy, with interest rate hikes to come, should motorists start having to pay £2 per litre at the pumps and the situation in Libya and the Middle East is certainly threatening this, whether we like it or not.

The scenario in North Africa and the Middle East is likely to keep a roof on any equity rally for the time being until traders start to see the price of crude oil consolidate.

Inmarsat shares slump 10% on earnings
Traders sold out of Inmarsat shares this morning after the satellite telecommunications operator said that maritime revenue would grow by 2% – 4% this year, below market expectations and dampening sentiment somewhat. The company relies on maritime operations for almost half its total revenue and so the lower than expected growth and cautious tone of the results has hit trading sentiment today. As a result, shares hit a new 16-month low of 587p.

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.