European indices tread water after China imports disappointment
City Index June 10, 2011 9:46 PM
<p>The FTSE 100, DAX and CAC all treaded water on Friday in light trading volume as weakness in banks and miners was countered by gains […]</p>
The FTSE 100, DAX and CAC all treaded water on Friday in light trading volume as weakness in banks and miners was countered by gains in utilities and tech stocks.
A surprising fall of 3% in copper imports to China has tempered demand for mining stocks this morning, forcing the sector lower by 0.5%. The fall in imports is not necessarily a shock, which would have likely seen a greater fall than witnessed in today’s session thus far.
However, coming off the back of already well entrenched concerns regarding longer term copper demand in the midst of monetary policy tightening, the data has indices see an expected cautious reaction from investors, who have sold out of mining stocks as a result. ENRC was the top faller on the day, with shares slumping near 3%.
A positive broker comment on Tesco from Jefferies was enough to lift share prices near 1%. The broker upgraded its stance on the stock to a ‘buy’ from ‘hold’, telling clients that strong capital structure and properties make the stock attractive. With Tesco reporting to the market next week, some of the buys we have seen today have certainly been borne out of speculation.
Traders will keep an eye out for US economic data, out this afternoon in the shape of export and import prices. The market is expecting US exports prices to slow to 0.3%, whilst imports are expected to contract 0.7%, from 2.2% in the previous month.