Equity moves reflect post-party nation

Trading is flat to ever-so-slightly higher as traders return to their desks this week. Volumes are notably higher, however, and global services output has formed the basis for much of the sentiment this morning.

China’s services purchasing managers index (PMI) has set the overall tone, as pace of recovery there is called into question owing to the index falling to 50.9 in December from 52.5 the previous month. The FTSE 100 has, as usual, seen greater adverse effects on the basis of this news, as the mining sector once again takes up the bottom four places on the UK benchmark. 

Taking the top spot in the FTSE today is RSA Insurance. The company has shed some 28% over the past couple of months, as rumours that further write-downs may not be necessary has seen the share price jump 7%. 

Italy and France are now the weak links in the eurozone chain, and even Germany has seen a softer output in December. Spain has powered ahead with services output, beating estimates by quite a distance at 54.2. This, hot on the heels of its fall in unemployment, bodes well for the peripheral country. Ireland has also been providing cheer; data emanating from the debt-laden state has been better-than-expected of late, after the services PMI in December rose at its fastest rate since February 2007 to 61.8 from 57.1 in November.

Here in the UK the PMI failed to meet expectations, yet the data would suggest that GDP for 2013 will be around 1.9%. The pound has seen some downside against the dollar as a result. The US PMI data is expected to show some improvement, from 53.9 to 54.6 in December, and this speculation is supporting the greenback.

The Dow Jones is currently expected to open up 9 points at 14,478.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.