Rising sun leads equities higher

Bullish Asian markets help keep equity markets’ momentum, driving shares higher around Europe.

Source: Bloomberg
  • The Nikkei leads the Asian markets’ charge, hitting seven-year highs
  • European equity markets maintain global momentum
  • UK house builders continue to impress

Now that the US, UK and China have all got their bank holidays out of the way and trading floors are once again full, equity markets have in unison made efforts to claw back ground lost after last month’s sell off.  Yesterday saw fresh rumours that the European Central Bank were in discussions about extending the current QE policy and this has only increased the city’s belief that the targeted September 2016 end date is likely to be extended.

Thursday however still remains the day that could derail the FTSE 100 with the all-in-one MPC interest rate decision, along with how the voting went, and an accompanying statement of intention. Considering the nerves shown by markets over the last month and the poor UK production figures released today, the chances of rates changing at the turn of the year still remains a long shot regardless of what the governor of the Bank of England has previously stated.  

Those companies posting figures or trading updates have broadly added to the feel good factor that equity indices have given traders this morning. Maintaining a recent record of outperforming Barratt Developments has again underlined the impressive form of UK house builders with full-year pre-tax profits up another 44%. As yet the fear of interest rate rises have failed to dent profits.

No currency headwinds for Ryanair as the strong pound, combined with poor seasonal weather in northern Europe, has seen a late flurry of sun-seeking Europeans send profits flying forcing the airline to increase full-year targets by 25%.

The short-term profitability of Hargreaves Lansdown might be softer but with client numbers and assets under management both increasing by 11% and 18% respectively, the investment firm looks well placed for the year ahead.

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