Santa rally continues as FTSE flirts with 6000
City Index December 23, 2010 3:54 PM
<p>The Christmas rally showed no signs of abating as the European markets marched higher for the fourth consecutive day. The UK index very nearly breached […]</p>
The Christmas rally showed no signs of abating as the European markets marched higher for the fourth consecutive day. The UK index very nearly breached the psychology important 6000 level as bull traders were able to mark the card amid low volumes. Germanys Dax also posted new year highs as investors seemed reassured by easing Euro debt fears.
Although volumes have been light, investors have been buoyed by reassurance from China that they have been prepared to purchase Portuguese debt, reiterating their support for the Euro zone and its currency. Despite the fact that Euro dollar has remained reasonably static since the high of the Irish debt crisis investors seem more confident that the debt issues are now under control. Bear traders warn however that such dramatic gains in European equity markets in December, a mighty 10% in for weeks, are nothing more than a year end mark up. Expectation is rife that once volumes resumes in the New Year, the equity markets could come under pressure as reality bites again in the New Year.
In specific news Rio Tinto drifted lower after announcing that they have reached agreement on the Riverside Mining Bid. Other miners were a mixed bag after a yesterdays solid performance, the sector has in no small part led the Christmas rally over the past weeks, with Lonmin, Fresnillo and Kazkmyhs all closing on relative 3 month highs to the F100. Financial stocks also managed muted gains as the easing of Euro debt worries helped banks with peripheral debt concerns, namely Lloyds and Royal Bank of Scotland. Those investors who aren’t last minute Christmas shopping will cast an eye to US macro data released later this afternoon when durable goods data and jobless claims will give the final indication to the health of the US economy before the Christmas break.