European markets rebound as sentiment remains nervous
City Index April 13, 2011 7:35 PM
<p>European equity markets did their best to retrace yesterday’s losses as strong banks and miners rebounded from Tuesday’s lows. Banks were the top performing sector […]</p>
European equity markets did their best to retrace yesterday’s losses as strong banks and miners rebounded from Tuesday’s lows. Banks were the top performing sector in London, with Lloyds leading the way after suffering a sell off to near nine-month lows yesterday. Comments from the ICB regarding the sale of a number of branches saw the stock trade down to 60p yesterday, but more positive sentiment revaluation from UBS saw the stock regain some momentum. Other banks including Barclays and HSBC helped to drive the index better, with HSBC gaining nearly 2% and helping to add 10 points to the FTSE 50-point move.
Mining stocks also recovered some of yesterday’s losses despite a disappointing update on production from Rio Tinto. Rio Tinto fell in early trading after the update, but investors were keen to pick up cheap stock, turning the stock positive by midday. Fresnillo led the sector higher, adding 2.5% after matching production targets in silver, but with gold production outperforming. Antofagasta and Xstrata also featured on the winners list as sentiment began to shore up after yesterday’s falls. Arm Holdings topped the leader board, rallying 4% to 582.5p and reversing yesterday’s falls as traders cited a bullish note from Morgan Stanley following a positive presentation in the States. Arm has been a darling of investors in the last year, doubling its share price in 12 months; today’s move is just another example of the positive sentiment that remains around the software developer.
Despite the move back through 6000, investors remained cautious about the morning rally as the severity of yesterday’s sell off remained fresh on their minds. Concerns over sovereign debt, ongoing ramification for banking reform and issues surrounding the nuclear crisis in Japan remain a drag on sentiment; such concerns are unlikely to disappear until the market is able to consolidate above crucial technical levels.
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