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Confidence in the equity market is dwindling as the modest gains that were produced at the beginning of the day are slowly being whittled down.
The overall sentiment is still sceptical, and China’s trade balance figures, due overnight, have prevented dealers from running with the rally. Granted, there hasn’t been a lot of news today and traders were given no real reason to buy into the market, and eventually their fearful side kicked in.
Traders know all too well that there are bargains to be had in the market, but we have seen so many painful sell-offs recently that it will take a lot to talk traders into buying mode again. Concerns over the health of the Chinese economy are keeping the bulls at bay, and until those fears are put to bed any rally will be short-lived.
Even the golden boy of the FTSE 100, the mega-miner Glencore, couldn’t build on its stellar start to the trading session and has retreated from its morning high. The bargain hunters in Glencore were quickly weeded out as it will take a lot more than debt restructuring to change its fortunes back to rosy. Meanwhile, the short-sellers are waiting in the wings because the metals market still has a poor outlook.