FTSE marginally up for the first time this week
Fiona Cincotta May 10, 2012 9:45 AM
<p>The FTSE 100 is seen going into the close very marginally up for the first time this week, after two consecutive downbeat sessions which saw […]</p>
The FTSE 100 is seen going into the close very marginally up for the first time this week, after two consecutive downbeat sessions which saw the blue chip index shed 2.2% and hit its lowest level of the year on Wednesday.
Today the FTSE100 proved to be fairly range- bound failing to push much higher than 5560 whilst finding a support at 5490, a sign that investors are pausing for breath following a news driven week of trading.
Weak Chinese trade data this morning brought back that nagging concern of growth slowing for the Red Dragon and further undermined risk appetite which was suffering following concerns in the eurozone. As a result investors have continued to exert short term trading strategies and act to reduce the risk is their portfolio, perhaps an approach which we will see progressively more of as May continues.
With a lack of economic data flowing out of the US the focus was plainly on the Bank of England’s Rate decision and Asset Purchase Target at midday. The Bank, as expected, left the key lending rate unchanged at 0.5%. Perhaps more notably the nine members Monetary Policy Committee decided to maintain the asset-buying program at 325billion pounds and unlike in previous statements, they made no mention of the size of the programme being kept under review.
Given that inflation figures for the UK were 3.5% in March, well above the bank’s 2% target it would suggest that inflationary worries are taking the edge over worries for the state of the economy for the time being, even though the UK has technically slipped back into recession. Despite a short sell off following the announcement the FTSE 100 found the energy to push back into positive territory for the close.
Equities taking the headlines today included ARM Holdings who topped leader board gaining over 4% following broker upgrades and its target price being adjusted to 490p from 460p. Old Mutual was also in demand after announcing a 6% rise in its funds under management, this saw the stock gain over 4% throughout the course of the day.
Looking towards tomorrow the Chinese Inflation figures will add more depth to the story for investors but the main focus will look towards the Economic growth forecasts released by the European Commission.
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