FTSE trades higher on bargain hunting

The FTSE 100 traded higher by some 0.8%, tracking similar gains across Europe, as bargain hunters made their move with optimism raised by gains across the pond in US markets over the last 48 hours.

The miners and oil are the two sectors which have attracted much of today’s bargain hunting, with these two heavyweight sectors rallying around 2% on the day, providing much of the energy behind today’s index gains.

A Greek tragedy?It may however be a little too early to tell whether the buying we have seen over the last few sessions is a signal of a longer term change in market optimism, given the continued fragility of economic data and with an all-important vote of confidence to come in Greece at 10pm GMT tonight.

Should the no confidence vote pass tonight, the ramifications for Greece could be disastrous and the ripple effect from this shock is likely to be felt hard in wider Europe.

That said, investors have traded with confidence that the Greek government will survive tonight’s vote of no confidence and then move to secure the latest austerity measures required by their European brethren next week to secure the next tranche of loans and second bailout. However, given the volatility of the situation in Greece, investors remain alert for any shocks and most contracts that have been picked up with a long bias today have been relatively short term in terms of expiry.

It is this optimism that has helped to lift equities and the euro today, with the DAX and CAC both trading higher by around 1%, whilst the euro has also enjoyed gains of 0.5% against the US dollar. Indeed the euro shrugged off well the really poor German ZEW confidence number, which hit its lowest point since January 2009. Though in truth, most traders will look ahead to Friday’s Ifo Business Survey figure for a better gauge of the German economic climate.

Premier Inn bookings lift Whitbread
In terms of the individual stock movers, we have Whitbread charging straight to the top of the FTSE 100, rallying 6% after the hotelier and coffee shop owner reported an increase in sales at its Premier Inn chain. The company said sales at Premier Inn hotels open more than a year grew by 3% in the first quarter, with revenue per room up 2.4% overall and 8.8% in London alone. This stat alone potentially heightens the fact that visitors to high expense areas such as London are continually looking to cut costs, with the lower priced hotels such as Premier Inn benefitting.