Resource stocks remain in vogue

In mid-morning trading the FTSE 100 is broadly unchanged after yesterday’s surge beyond the 6500 mark.

Equity markets are holding onto their gains, largely driven my mining companies and the prospect of a special dividend from Vodafone. The expanding services sector in China has given traders a reason to remain long on natural resource stocks.

Vodafone is to sell off its 45% stake in Verizon Wireless for $130 billion, and the London-listed telecoms giant is to return £54 billion to its shareholders in the form of a dividend. Vodafone has made it clear that its European operations are stagnant, but by disposing of its stake in Verizon, I do wonder if they are selling the goose that laid the golden egg.

The UK economy is going from strength to strength, with the latest construction PMI data not only exceeding expectations but attaining a near six-year high.

In the US, equities will be reopening this afternoon following the Labor Day holiday yesterday, and we are expecting the Dow Jones to open 90 points higher at 14,900.

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