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Dip buyers continue to make hay in UK and European markets today, giddily buying up almost everything in sight. This continues the theme of Monday’s session, when a big gap down for major indices brought out the optimist in everyone. Some more cautious souls are still puzzling over why indices should suddenly be flavour of the month when they were so comprehensively routed last week, but if nothing else it is perhaps the merciful absence of Federal Reserve jawboning regarding a December policy move that has emboldened investors.
Smiths Group has shot to the top of the index after it reported a reduction in the size of its pensions black hole; while the ulcer has still to be lanced entirely it has revived speculation that the conglomerate might start selling off some choicer parts.
Meanwhile easyJet has proven the value of the old adage that ‘it is better to travel than to arrive’. Despite another year of record profits, with healthy margin growth thrown in as well, the shares still took a hit, as concerns about a drop in European tourism in coming months took their toll.
US markets have been less enthusiastic about further gains, moving only slightly higher in the opening part of the session. CPI figures for October were in line with expectations, and with overall CPI growth gaining pace over the year and core prices holding steady, the December rate hike camp were able to remain confident in their outlook for monetary policy.
Fed minutes are on the calendar tomorrow, and until these are released it looks like there will be little bullish follow-through from Monday’s outstanding session.