Spreadex Market Update
Markets begin to bounce back with positive news from China
The markets were buoyed this morning by the news that China’s central bank has taken fresh, if tentative, steps in combatting the economic slowdown that has plagued the country by reducing the amount its banks need to hold as reserves, in the process aiding the banks’ lending power. Despite the late-in-the-day sell-off in Asia, this news still helped boost the European markets on a Monday morning light on economic data.
Unsurprisingly, the focus in the Eurozone remains firmly on Greece, with little in the way of economic news to distract investors from the fiscal floundering over in Athens. The IMF this morning has claimed that progress is being made, with the Washington-based institution ‘hopeful’ a solution can be found. However, these hopes look like they will have to stretch beyond Friday’s Eurogroup meeting, with sentiment in the region largely suggesting that there will be little in the way of formalised action by the end of the week. Regardless, the tone is less doom-laden this Monday morning, and has allowed the Eurozone indices to escape from under the dark clouds that were covering the markets last Friday to post gains after the bell.
The FTSE managed to push back above 7000 this morning after last Friday’s sell-off put the UK index’s recent record run in jeopardy. The FTSE has in no doubt been helped by the sustained performance of Brent Crude, which is continuing to trade at around $64 per barrel. A strengthened oil sector was joined by robust growth for the mining sector, likely boosted by the bank reserve-cutting news from China, with Vedanta Resources, KAZ Minerals and Rio Tinto all posting notable gains as the morning continued.
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