Headline surprises keep investors guessing

Heading into the close the FTSE 100 is down by over 90 points, as surprise headlines rock markets.

Wall Street traders at work
Source: Bloomberg

UK markets see heavy selling

It has been a day for scary headlines, which always proves to be a dangerous time for financial markets. This morning the Finns were reported to be engaging in a spot of sub hunting off Helsinki, while during the afternoon we saw fresh falls as reports hit (and were later denied) of Iranian forces taking control of a US vessel. Details are sketchy, but combined with still unsettled sentiment over the Greek situation and a general malaise of disappointment regarding Apple earnings, it set the stage for triple-digit losses on many indices.

Unsurprisingly the only real gainers in London during the afternoon were gold miners, as geopolitical jitters gave traders their chance to jump back into these unloved shares, while the usual crop of high-growth names like ARM came in for some hefty selling.

Whitbread shares were not immune, despite another strong set of figures, perhaps due to continuing disappointment that the firm refuses to let go of Costa Coffee and removing the chance of a special dividend that any such sale might bring.

Apple figures unable to lift US markets

It seems that not even another stellar quarter from Apple can restore the bullish sentiment that markets have lacked for the past few weeks. To add to the catalogue of woes, US consumer confidence, hitherto one of the star performers of American economic data, fell victim to the general malaise, coming in well below expectations.

The problem for investors in all markets is that while they haven’t found reasons to sell stocks, they haven’t got firm arguments for buying them either, condemning us all to more of this whipsaw action.

As has been the case for the past two weeks, dips below 18,000 in the Dow Jones continue to find buyers, and just to be contrarian the small-cap Russell 2000 is moving  higher, having led the way down yesterday.

Gold and silver find buyers

The Iran news gave gold and silver buyers the cue they needed to follow up on yesterday’s bounce with yet more buying, but even after the reports were said to be false the rationale remained. US dollar weakness on those consumer confidence numbers is playing its part, as the market looks towards the Federal Open Market Committee meeting tomorrow.

Oil prices moved higher thanks to the Iran news, but were unable to hold their gains once the initial excitement was proved to be false.

Cable makes gains

Cable opted to look beyond the negatives from this morning’s UK GDP report, with the currency pair moving yet higher. With only around 40% of data available for this first growth reading, there is plenty of potential for the original 0.3% number to be revised up, and anyone cynical enough to point out that a downward revision was also perfectly possible clearly received short shrift.

The euro also held its gains, lifted by ongoing optimism that Greece might be in with a greater chance of reaching an agreement thanks to a more conciliatory tone from Prime Minister Tsipras.

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.