FTSE starts week up 30 points

The FTSE 100 has made a perky start to the week, adding almost 30 points in the first half hour of trading as investors hunt for value after last week’s selloff.

Canary Wharf
Source: Bloomberg

After a couple of days off, the worries and fears of the previous week appear to have been consigned to history. Traders comforted with a decent correction and the perception of better value start the latest round of 'buy on the dip' investment.

It's a slow start to the economic calendar today, however, with Tuesday morning's German ZEW confidence figures looking to be the first highlight of the week; unfortunately they were calibrated a little too early for the country's World Cup exploits to boost anybody's morale.  

Shire has spent the weekend fluttering its eyes in the direction of AbbVie, encouraging the US drug manufacturer to try its luck once again around the £53 level. Considering the noises coming out of Washington, the window of opportunity for US firms to benefit from the UK’s considerably more attractive tax benefits might not stay open too long.

Rolls-Royce has been boosted with the news that the new Airbus A330neo will be powered by its Trent 7000 engine adding to the list of modern wide-bodied planes using its engines.

Once again Barclays look to be cashing in some of its chips, with the sale of its index business set to generate $1 billion; far more than had been previously expected.  

The second week of reporting season in the US starts today, with many more of the US heavyweights reporting, such as Goldman Sachs, Yahoo!, Bank of America, eBay, IBMand General Electric. First up however is Citigroup, who should no doubt take the lion’s share of trader’s attention this afternoon. Rumours have persisted that it will announce the exact size of its multi-billion dollar fine from US regulators; something sure to keep the mood sombre.

Ahead of the open, we expect the Dow Jones to start 58 points higher at 17,001, once again jumping that psychological hurdle.

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