London market stands still

In mid-morning trading the FTSE 100 is broadly unchanged as dealers are unsure which way to turn.

Traders outside the London Stock Exchange
Source: Bloomberg

Equity markets are mixed this morning as Asia posted modest gains. There certainly isn’t the same buying momentum that we experienced yesterday, and traders are searching for another reason to buy. It seems like we are at a crossroads; if a break to the upside isn’t made soon, we could be in for a slow decent.

The closure of the Chinese market for Golden Week is both a help and a hindrance; the speculation of a stimulus package by Beijing hasn’t been confirmed or denied, and when the country is back to business on Thursday it will be a crucial moment for global markets.

The mining stocks have lost the most ground today, and the speed at which traders are cashing in their long positions  after a massive rally sums up how dealers feel about natural resource stocks at the moment.

Dealers are still cautious when it comes to commodity companies because the fact remains that China is cooling off and demand for minerals is dwindling, but at the same time the whispers of an easing scheme from Beijing is keeping the bargain hunters in the loop.

We are expecting the Dow Jones to open 20 points lower, at 16,750. The US market is catching its breath for the moment, but it is well positioned ahead of the New York open as a marginal decline in the futures market is nothing to be alarmed over. US dealers can always fall back on the comfort the Fed are becoming less likely to hike interest rates this year, which will keep the bulls happy. 

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.