Spreadex Market Update
European markets post tentative losses following yesterday’s late surge
Given the morning’s mixture of bad news it is surprising that, at a 0.3%-0.4% loss, the FTSE hasn’t opened lower this Wednesday. As there are a couple factors, beyond the general bearish tone of the morning, that could weigh on the FTSE at the moment. The impact of Brent Crude’s latest tumble (with the black stuff around one dollar above the $30 per barrel threshold it has been dancing around for the past couple of weeks) and the subsequent declines seen in the oil and mining sectors is the most immediate drag on the UK index this Wednesday.
On top of that came a 3-and-a-third year low hitting fall from the Royal Bank of Scotland following the investors-surprising announcement of another £2.5 billion in provisions to cover the bank’s multiple instances of bad behaviour. Of course this put the fine-cat among the other bank stock-pigeons, with Barclays, Lloyds and HSBC all falling between 0.5% and 2%. Yet instead of going under, the FTSE is holding (sort of) firm, aided by a decent showing from the likes of Sage Group, Aberdeen Asset Management (both of which reported this morning) and Home Retail Group (following yesterday’s news that Sainsbury’s investors may support a ‘modest’ rise in the supermarket’s offer for the Argos-owner).
There was a similar situation in the Eurozone; the DAX and CAC tumbled around 0.5% and 0.2% respectively after the bell, the general lack of data this morning (a trend in the first half of this week) for now helping to bring investors’ fears, temporarily banished yesterday afternoon with a strong set of US data, back to the forefront.
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