FTSE mostly flat in very quiet session

<p>An unusually quiet trading session saw the FTSE 100 trade within a 20-point range for much of the day to close near flat territory. Today’s […]</p>

An unusually quiet trading session saw the FTSE 100 trade within a 20-point range for much of the day to close near flat territory. Today’s session was more of a sign that traders are waiting to see whether the UK index can close above resistance levels between 6091-6117 and push on.

Negative data for equities from across the pond gave traders little encouragement to add to their existing ‘buy’ positions with both jobless claims and inflation data coming in slightly higher than the market had expected. When both pieces of data came out at 1.30pm GMT, the UK index, and its European index peers sold off somewhat as traders crystallised positions.

On the flip side, the Philadelphia Fed Index showed that business activity in the US grew much more than expected in February, hitting its highest level for seven years, giving the US economic recovery another good vibe. However, the Philly Fed did little to inspire investors on a rather lacklustre Thursday trading.

Banks in demand again
In terms of sectors, it has been another strong performance for banking stocks with Royal Bank of Scotland and Lloyds Banking Group amongst the top gainers in London. On top of increased trader optimism that the two UK banks could report a similarly bullish performance to that of Barclays when they announce earnings next week, a number of brokers have sent positive notes regarding outlook for both RBS and Lloyds. As such, this has continued to add to the positive banking sentiment amongst traders to lift the banking sector to its highest level for 10 months.

The price of copper fell over 1% today, giving traders an excuse to reduce some of their exposures in mining firms such as Rio Tinto and Xstrata, with the latter’s share prices bearing the brunt of the selling, falling over 2%.

A sales warning from BAE Systems which said it expected sales to fall around 20% as a result of the poor performance of its land and armanents business hit the firm’s shares today by as much as 4.4%. Traders have, as expected, clung to the sales warning and turned a blind eye to the marginal increase in profits for the year.

Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.