FTSE flat as trader’s eye Christmas absence – banks weigh on Ireland credit downgrade
City Index December 17, 2010 5:50 PM
<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.
GAIN Capital UK Limited (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.