FTSE loses small in choppy trading – 9th straight losing day
City Index November 24, 2011 8:39 PM
<p>The FTSE 100 lost 12 points on Thursday in a quiet trading day with low volumes as US markets were shut for the thanksgiving holiday, […]</p>
The FTSE 100 lost 12 points on Thursday in a quiet trading day with low volumes as US markets were shut for the thanksgiving holiday, making trading particularly choppy.
A brief respite in banking and mining firms, two stock sectors that has seen heavy weakness recently as investors shied away from risky asset classes, was one positive factor on the day. Both sectors gained over 1% on the day. That said, both sectors have lost a significant amount of ground recently and much of today’s gains in this area was mostly on bargain hunting, which typically is a short term move. Therefore, today’s gains in banks and miners does not represent a change in near term bearish sentiment that has weighed on prices of Lloyds, Barclays and Rio Tinto for example.
Today’s losses on the FTSE 100 marks a ninth straight day of weakness for the UK Index with investors continuing to shy away from buying into stocks with so much uncertainty remaining in the euro area and weakening global growth prospects.
Today’s talks between Angela Merkel, Nicolas Sarkozy and newly installed Italian PM Mario Monti failed to deliver any real degree of improvement in sentiment or boost investor confidence that the euro crisis is being effectively managed by Europe’s leaders. Whilst Merkel and Sarkozy agreed to refrain from applying pressure on the ECB in public, Merkel’s determination to prevent any implementation of a euro bond before proper fiscal integration of the euro area is seen, something that could take years to achieve, sent markets in an afternoon tailspin, forcing the FTSE 100 back from the highs reached on the day of 5184 to close at 5127.
An unexpected rise in German IFO business conditions had given stocks a filip to push higher in early trading before seeing afternoon weakness. German IFO business climate rose from 106.4 to 106.6 when most had expected a modest fall, with business expectations also nudging higher unexpectedly. The data did help to calm some of the more nervy investors who still had Germany’s dreadful bond auction on their minds from yesterday.
StoneX Financial Ltd (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.