FTSE rallies on Wall Street recovery but ends the year on a low
Fiona Cincotta December 28, 2018 10:33 AM
The FTSE has started the penultimate day of trading this year on higher ground, taking its cue from a recovery on Wall Street and bouncing back from a 2-year low where it closed on Thursday.
The FTSE has started the penultimate day of trading this year on higher ground, taking its cue from a recovery on Wall Street and bouncing back from a 2-year low where it closed on Thursday. Despite the snap recovery the London index has left the heady heights of 7755 in January far in the rear view mirror and is threatening to start 2019 in bear territory.
Thinner volumes lead to volatility
The post holiday trade with its thinner than usual volumes is providing for volatile price moves which will stabilize once the full set of investors is back in the market. For the time being watch the gyration of the US indices – the Dow losing more than 600 points during the day Thursday and then regaining all of it to close the day 260 points higher. This morning’s moves in US futures indicated a stronger start to the day, possibly helped by the fact that the pause button has been pressed on many political decisions till January. The standoff between President Trump and the Congress is continuing to paralyse the workings of the US government and the partial operational shutdown is keeping the dollar under pressure. The greenback is weaker against the yen and the euro although the moves are relatively slim and volumes thin. The euro perked up after the European Central Bank published its economic bulletin pointing to inflationary pressures in the Eurozone next year which will force the ECB to re-evaluate its rate policy for next year, although a quick decision on a hike remains unlikely given the rest of the Eurozone economic growth.
Oil bounces higher
Brent concludes a period of volatile trading at a higher level, up 1.93%, but remains at year lows of between $53 and $54. In theory the cuts agreed by OPEC members, Saudi Arabia and Russia earlier in December should start filtering through into the supply chain and start supporting the market but for the time being the readings on US reserve levels and the available volumes in Europe are keeping the market in the current range.
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