Spreadex Market Update
European and US indices fayre well
The market this week could be said to look healthier than it did two weeks earlier at a similar price for one good reason: at the beginning of last week the sellers tested those looking to buy into the current market, and the negative price action created as a result of that selling quickly recovered, within a week in fact.
And given that one of the most significant concerns of participants of late has been the virtually uncorrected positive run equities have had since late last year, the cash that investors believed would be taken from the table has to some extent happened.
This, then, potentially bodes well for anyone long of stocks at the moment, with profit-taking so far comfortably absorbed.
On the main market in London today investors turn to the continued volatility seen from Gulf Keystone (GKP), an oil and gas explorer operating in the northern Iraq region of Kurdistan listed through AIM.
The stock, subject to various on-going rumours, is trading higher 10% today after falling some 16% yesterday in spite of a positive operational update. Various broker comments pointing to the political risks surrounding the company’s licences and a rumour that Exxon Mobil (XOM) could abstain from bidding for the company or its assets dragged the stock’s price much lower from its recent intra-day high of 465p. Given the recent eye-watering volatility, leverage ought to be used only with extreme caution.
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