FTSE lifted by miners and retailers

Heading into the close, the FTSE 100 seems content to have added 30 points for the day as it receives further support from markets across the Atlantic.

Burberry in demand

Miners and retailers have dominated the action in London as economic figures from China and a reasonably strong performance from Tesco and Burberry lifted the market. Although the GDP figure was below the previous quarter’s, and industrial production was still weak, the raw materials sector was comforted by the thought that the downward momentum in Chinese figures has come to an end. Meanwhile, Tesco saw profits drop yet again but investors have opted to take the positive view for today at least, concentrating on the firm’s overarching predominance in size and reach versus its rivals;  income hunters will be grateful the dividend was left untouched. 

Burberry saw its shares rise 2.7% after demand in China and Korea revived, nudging second-half revenues in the direction of £1 billion. However, the firm warned that a stronger pound could take its toll in the future. A warning that may become more and more common among exporters if sterling continues to gain ground against the US dollar.

Tech sector sentiment to be tested

US markets have started the session in better form than they did yesterday, when gains rapidly evaporated after an initial bounce. Housing starts and building permits were both weaker in March, while Bank of America did its best to undo the positive feeling created by Intel and Yahoo last night; the bank reported a first-quarter loss of $276 million. Thus far in bank earnings we are 2-1 in favour of poor figures, so the onus will be on Morgan Stanley to liven up the situation. 

After two days of gains we can expect to see some directionless trading, and it will be up to Google and IBM to keep up the positive earnings trend in non-financials. Sentiment in the tech sector will have a further test tomorrow when Weibo lists. While the 'Chinese Twitter' has opted for a more sober valuation than its US cousin, it still needs to post a profit at some point in the future.

Chinese data pushes copper higher

Copper’s battle for $3 per pound was renewed today as Chinese figures pushed the metal back above this key level. The better-than-expected figure has given us a relief rally here, but what is lacking at present is the momentum to break out of the current range. Weaker Chinese industrial production figures took the gloss off the GDP reading, indicating that demand may still remain weak even if Chinese growth does pick up. The $3 level remains the magnetic price for copper, but an absence of really positive news will see us retest the March lows around $2.90/pound if we cannot hold the current price.

UK unemployment boosts cable

The star performer of the day is GBP/USD, which was enlivened by UK jobless figures that saw the unemployment rate drop below 7%. Mark Carney will be relieved that he backpedalled on this element of forward guidance; had he not, the Bank of England would now be facing uncomfortable questions on the timing of the next rate rise. 

However, we have now run straight into the $1.68 level where previous short-term rallies have stalled. The longer-term trend direction is certainly still up, and while the immediate price action may be on the downside as we drop back from $1.68, heightened expectations of a UK rate hike will most likely put further upward impetus into the GBP/USD rally.  

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.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.