Established in 1974
185,800 clients worldwide
Over 15,000 markets

Profit-taking follows relief rally

In mid-morning trading the FTSE 100 is down 30 points as profit-taking sets in.

Equities in London are a touch lower after US equities closed at a record high yesterday. Political tensions between Ukraine and Russia are far from over, but currently diplomacy is leading the charge rather than military force. Traders welcomed the political solution so much that the relief rally yesterday was bigger than Monday’s selloff. Banking stocks are extending yesterday’s gains but we are beginning to ask the question, how much higher can we go? 

Beijing has reiterated its 7.5% growth forecast, however it is not the level of growth traders are concerned about but how the growth is attained. China’s credit-to-growth ratio is increasing, and it only matter of time before bad debts start to rack up. Mining stocks have slipped into the red after the HSBC Chinese composite PMI had its first contraction in seven months. 

Shares in Bank of Ireland have recovered slightly after Fairfax Financial and Wilbur Ross disposed of a large stake in the Irish bank yesterday. The UK services sector expanded in February, which just goes to show that nearly five years of rock bottom interest rates pay off. 

In the US we are expecting the Dow Jones to open five points lower at 16,390 as traders take their profits. 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.