FTSE flat as trader’s eye Christmas absence – banks weigh on Ireland credit downgrade

<p>The FTSE traded largely flat on the day to mark a rather uneventful trading session. Being triple witching day, where options and futures contracts expire, and just […]</p>

The FTSE traded largely flat on the day to mark a rather uneventful trading session.

Being triple witching day, where options and futures contracts expire, and just over a week away from Christmas day, it seems that traders are in the process for wrapping things up for an expected leave of absence from the market. Of the small amount of activity we have seen outside of contracts expiry has been focused on downsizing equity risk in banking stocks after Moody’s downgraded Irelands’ credit rating.

Ireland rating cut hits UK banks
The worst hit banks were Royal Bank of Scotland and Lloyds Banking Group, with both shares falling around 4% on the day. A cut in Ireland’s credit rating from Moody’s given the circumstances is of no real surprise of course, but the fact that it was cut five notches and emphasised more cuts are likely has only increased investor sensitivity.

We are getting to the stage now that euro zone debt fears could keep a leash on any potential gains to be made next year and traders are likely to want to see an EU wide fiscal solution to combat any domino effect that there may be before this debt cloud can be lifted and stocks can get a free run.

Astrazeneca tops the fallers list
We have also seen selling out of AstraZeneca’s shares, which tops the FTSE’s faller list, after the pharmaceutical firms’ heart drug Brilinta failed to secure approval from US regulators. The firm has high hopes for Brilinta’s potential to tap into space dominated by rival drug Plavix and the news is a set back with many in the market expecting the drug to win FDA approval.

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