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

FTSE fights to keep gains

Last night’s US selloff has dented European markets’ enthusiasm, with the FTSE 100 battling to remain above the 7000 level. 

London
Source: Bloomberg

Yesterday’s UK inflation news, or more accurately the absence of inflation, was met with muted excitement as GBP/USD hardly registered an interest in what had been signposted for some time. The FTSE has gamely held above the 7,000 level, and having taken so long to breach this summit it appears reluctant to give up these gains regardless of how flighty the European markets look. This morning’s fractionally better-than-expected German Ifo figures should go some way to shoring up sentiment in the eurozone.

United Utilities has confirmed it is on track to meet the markets’ full-year expectations, with revenue slightly higher and financing costs falling. Notable by its absence was any reference to the Labour Party’s stance on greater powers being passed onto utility regulators.

Balfour Beatty continues to disappoint the market with its latest full-year figures showing a loss of £59 million as 2014 saw numerous profits warnings throughout the year, culminating in the company cancelling its final dividend.

Moneysupermarket.com founder Simon Nixon has had a very quick change of heart as yesterday’s announcement that he was going to sell a stake of 6.4% in the company has been rescinded. Maybe with inflation now at 0% he is waiting to release these funds on another occasion, as he has compared the market and decided selling at a later date might see his money go a little further.

Rounding off what have been impressive figures from the UK house building sector, Bellway has seen its first-half pre-tax profits jump by 53%, enabling the company to increase its interim dividend by 56% to 25p.

Today will see the release of US durable goods orders. The recent past has seen a frequent pattern of better-than-expected data coming out of the US, and it will be interesting to see how easily this trend can be maintained. Less convincing is the markets’ perception of the corporate arena as the dollar continues to flex its muscles, making US exporters shift nervously in their seats.

Ahead of the open we expect the Dow Jones to start 12 points higher at 18,023.

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.