This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Thursday’s sell-off across global equity markets does feel a little overdone and a calmer, more calculated assessment of equity fair values is probably called for today. Having said that, fears over the timing of US quantitative easing still persist and are preventing any enthusiastic ’buy on the dip’ traders from jumping into the market.
Under different circumstances the bullish stance of many commodities would have seen the FTSE 100’s commodity-based equities rally strongly, but their performance has been somewhat outweighed by a more generally cautious sentiment. Thinner trading volumes at this time of year can easily lead to over-exaggerated moves and this could account for some of the more wildly swinging stocks, such as Fresnillo, an equity that appears happiest when trading either up or down at least 5% in a day.
Later in the afternoon we will be able to digest the latest University of Michigan consumer sentiment figures, but how accurately that will indicate market trajectory at present is questionable.