European Indices turn weaker but FTSE 100 losses limited
City Index September 22, 2010 3:06 PM
<p>The DAX and CAC both suffered heavy falls in European trading as traders shunned risky asset classes but the FTSE showed more resilience, closing slightly […]</p>
The DAX and CAC both suffered heavy falls in European trading as traders shunned risky asset classes but the FTSE showed more resilience, closing slightly lower having staged a recovery in the afternoons session.
The German DAX and French CAC have both struggled of late to come through resistance levels and so naturally traders are targeting these two Indices as selling opportunities with both markets trading at the top end of their current trading ranges. Traders are waiting for both the DAX and CAC to break through their respective resistance levels before convincing that there are more bullish moves ahead.
The FTSE 100 however has shown much more resilience than its European peers today with traders coming into the afternoon session to buy back from what can be seen as excessive selling in the morning session. We have the miners to thank for much of today’s recovery in the FTSE 100. Were it not for strength in the miners, and Gold hitting a new record high of $1296.10, we could have been sitting on FTSE losses over around 1% today. The miners have climbed over 2% as a sector, hitting a new 4 month high in the process.
With Indices trading at or near resistance levels, traders are using anything negative as an excuse to cash in some gains. Today, they are using the Fed ‘no action yet’ and Deutsche Bank’s warning on sales and trading activity as excuses to take profits.