Bulls take their foot off the pedal

Heading into the close, the FTSE 100 is 40 points lower as US data puts investors in a risk averse frame of mind. 

London skyline
Source: Bloomberg

Equity markets are in retreat once more, as nervous investors continue to trim the gains made at the end of last week. In London, Anglo American and Antofagasta led the market lower, as caution on miners persists while the Chinese government meets to set new objectives for economic growth. The decision to tiptoe away from the 7% growth target still weighs on big mining firms, with investors continuing to cut exposure to the sector on concerns that Chinese demand will keep ebbing away.

Major numbers from the US this afternoon did not live up to expectations, with durable goods and consumer confidence both falling short; most investors would be inclined to agree the environment does not yet  seem right for an increase in US interest rates, an idea Janet Yellen seems in no hurry to dispel. A potentially significant Bank of Japan meeting at the end of the week only adds to the sense that now is not the time to add to positions, but rather to trim and await developments.

Results from Alibaba were at least relatively encouraging, with both active buyers and total transaction value on the up. However, despite the positive share price reaction, the poor performance of the firm in Western markets underscores the point that Alibaba has yet to gain a solid foothold outside of its homeland.

Apple’s earnings later today have only added to the feeling of nervousness, and those of a bullish disposition will be hoping that the forecast for its fiscal first-quarter, which includes December and represents a hefty slab of full-year earnings, will be strong.

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.