Spreadex Market Update
FTSE hits 4 week high despite 8% plunge from RBS; DAX and CAC hopeful of March stimulus following more missed inflation targets
Continuing yesterday’s Lloyds-led super surge the FTSE rose another 70ish point this morning to hit a 4 week high. The main thrust of its gains came from its verdant commodity sector, with Brent Crude (which has had an incredibly volatile few days) bouncing back from yesterday’s lows to near $35.50 per barrel, encroaching on month highs in the process and helping carry in the index to its recent peak.
If anything the FTSE actually could have been even more lively this Friday if it wasn’t for Royal Bank of Scotland; in stark contrast to Lloyds’ dreamy post-dividend announcement performance (which saw the stock cross the 70p for the first time since early January) RBS plunged by around 8% this morning as it reported an annual loss of £1.98 billion. Despite that loss being 43% lower than last year, and the fact that the markets had been pre-warned that the company was going to see its 8th consecutive year in the red, investors still revolted at the results. The main catalyst for their disgust was likely RBS’ continued litigation fees and fines; totalling £3.57 billion for 2015 the bank warned that it could still see ‘substantial incremental provisions’ in the next 12 months, the sector still blighted by its bad behaviour.
The Eurozone indices were even more buoyant than their UK peers this morning, the DAX and CAC rising by 2.1% and 1.9% respectively to match the highs hit earlier in the week. This despite a shoddy set of inflation figures which saw both the French (at 0.2% against the 0.4% forecast) and Spanish (atn-0.8% against the -0.5% anticipated) data underperform expectations. Of course, like yesterday’s region-wide miss, these inflation disappointments only reinforce the potential for a dose of Draghi stimulus in March, something that has likely helped the Eurozone indices increase their morning optimism.
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