Mixed opening for EU stocks as investors pause for breath
City Index March 15, 2012 2:00 PM
<p>European stock indices were mixed on Thursday, swinging between small gains and losses as investors paused for breath after a strong run in equities. The […]</p>
European stock indices were mixed on Thursday, swinging between small gains and losses as investors paused for breath after a strong run in equities.
The FTSE 100 lost just 8 points by 9.15am, whilst the DAX and CAC both saw gains of around 0.2% as oil weakness countered gains in mining stocks.
It’s been a relatively quiet opening to trading today with investors weighing up whether to cash in their gains after yesterday’s weaker session put a halt to five consecutive daily gains for the FTSE 100. Whilst it is positive that we have not seen any real bouts of profit taking yet, the FTSE’s failure to break above resistance at the psychological 6000 level yesterday, despite trading a mere 10 points off this level, is somewhat concerning investors.
The UK Index now needs to push through this level to target the key 6100 resistance level if the upside momentum is to continue in the medium term, or investors could be convinced into downsizing their risk to UK stocks and waiting for further buying opportunities.
Investors will continue to watch US economic data, out this afternoon, in the shape of Empire State Manufacturing, weekly jobless claims and Philadelphia Fed Business Survey. All three are likely to play a role in how UK stocks close out the day, particularly given the lack of news flow influencing price moves in the morning session.
Surprise resignation sees Tesco shares lose 1.3%
Shares in bellwether supermarket, Tesco, fell 1.3% on the FTSE 100 Index to be the worst performing stock after its head of UK business surprisingly stepped down. The move was also ill-timed considering it comes on the back of a profit warning two months ago and will naturally leave shareholders discontent at the highest levels concerning the company’s strategy for its crucial UK market.
There has been a knee jerk reaction in the shares today given the uncertainty of how much the situation may have deteriorated at the company to warrant the immediate removal of the UK business CEO. That said, with Philip Clarke taking steer of the UK ship, it will be interesting to see how quickly any loss of confidence in the firm by shareholders can be restored by this move in the coming days.