Draghi rally short-lived as FTSE struggles

The Draghi-inspired rally in the FTSE 100 has not lasted too long, and heading into the close a red hue is looking increasingly likely.

City of London
Source: Bloomberg

Food retailers dominate FTSE movers

Food retailers continue to dominate the leader board of FTSE movers, with both Morrisons and Marks & Spencer vying for the top spot. The positive mentality in that sector has even enabled Tesco shares out of the dog house (for the day at least).

As has frequently been the case of late, the FTSE has lagged behind other European equity markets as commodity prices continue to be pressed by the strength of the US dollar, knocking both the mining and energy companies in the index.

Randgold Resources posted results today and, considering gold is currently sitting at four-year lows and worries over Ebola persist, the markets have reacted well. CEO Mark Bristow’s confirmation that only spot gold levels below $1,000 would force the company to hand over ongoing operations has helped the shares higher.

With a launch date for Virgin Money yet to be confirmed, although due before the end of November, the IG grey market continues suggest a perceived company valuation of £1.5 billion.

Strong data supporting US markets

One year on and Twitter’s share price bears a striking resemblance to where it started its trading life, this of course is still a premium from the IPO price.

We are working our way to the end of the US reporting season but with AOL, Walt Disney and Zynga reporting today there are still a few eye catching names left.

The pattern of strong economic data continues to support equity markets as they once again set off in early trading with higher highs in their sights. Any wobbles that might be happening on the far side of the Atlantic are far too weak to shake the optimistic resolve currently gripping the US investment community.

Market specualtion weighs on Brent

Brent crude continues to be affected by the market speculation over Saudi and the OPEC nation’s ambitions to retain market share. Debate still rages as to how long energy prices will need to remain at these subdued levels before affecting the supply from the more expensive shale operations.

Both gold and silver continue to look anything but precious, as the US dollar and stifled demand force the prices lower.

EUR/USD below $1.24

Anyone expecting a shakeup in the currency markets triggered by changes to the interest rates from either the Bank of England or the European Central Bank will have been left disappointed, but not when it came to the Q&A session held by the ECB. Mario Draghi once again dealt with the press, giving clarification to the risk aspect of the asset-backed securities purchasing scheme and the reaffirmation of the ‘whatever it takes’ mentality. This strong stance of resilience saw EUR/USD spike down below the $1.24 level.

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