FTSE higher as G7 gets underway

In mid-morning trading the FTSE 100 is trading higher as the G7 meeting gets underway.

St Paul's, London
Source: Bloomberg

Greece will be a topic for discussion at the G7 meeting in Dresden, and even though Greek fears have been put on hold today, the rally in European equities will be restricted because of it. The traditional European fear was Greece would leave the Eurozone – now the possibility of the UK leaving the EU is becoming a cause for concern too. The Conservative government is tipped to hold a referendum on the UK’s EU membership within the next two years, and already the potential fallout has prompted British-based firms to draw up contingency plans. London’s finance houses will be paying attention to not only Greece’s membership of the single currency, but the UK’s position within the EU too.

Shares in Brewin Dolphin are lower this morning as profit-taking sets in. The financial services company has had a strong start to the financial year, and assets under management rose during the first-half of the year. The pullback in the share price offers a good opportunity for traders to buy into the company, as it has been in an upward trend for several years. An interest rate rise from the US later this year will ramp up volatility, which Brewin Dolphin will benefit from.

De La Rueshares traded below £5 today on the back of disappointing full-year numbers. The company’s share price has struggled over the past few years as a series of profit warnings has seen the stock price half in  less than three years. The company’s new CEO, Martin Sutherland, has started out on his new strategic plan, but the market is yet to be convinced.

Airlines are flying high this morning after the Irish government decided to sell its 25% stake in Aer Lingus to IAG. The Dublin administration has secured connectivity between Ireland and Great Britain for the next seven years, but Willie Walsh will have to woo Michael o’ Leary if IAG want to get its hands on the 29.8% stake of Aer Lingus which Ryanair own.

We are expecting the Dow Jones to open 20 points higher, at 18,061, after the comments from Stanley Fischer have put the bull’s fears at ease. Mr Fischer warned that the Fed will be wary of global growth when deciding its own monetary policy. The US is edging towards an interest rate hike while over two dozen central banks around the world have cut rates, and this gives the doves in the Fed more wiggle room.

IGA, may distribute information/research produced by its respective foreign marketing partners 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.