Markets rediscover their Christmas cheer

In mid-morning trading indices across Europe are sharply higher, as markets get the Christmas feeling once again. 

Source: Bloomberg

Last week ended poorly for those hoping for a festive rally, but hopes have been revived this morning, as markets put on some decent gains early on in the session.

Glencore and Anglo American are at the top of the FTSE leaderboard, which will tell you something about the nature of the rally – with little news expected this week, opportunistic bargain hunting and general festive sentiment will drive any bullish moves that develop over the next few days.

Spanish banking stocks have taken a hit this morning as investors ponder the rocky outlook for the country now that voters have rejected austerity measures.

There has been little read-across so far to other European markets, but the popular vote should send warning signals that continued austerity is unlikely to be accepted by voters for much longer.

ITV shares are in the ascendant this morning thanks to bid speculation over the weekend. Having enjoyed a 26% rise in 2015, there could be more to come for ITV shareholders if a bidding war does develop. With a strong stable of content, plus excellent ad revenues, ITV looks to be ripe for the picking.

Today’s calendar is relatively light, and with liquidity getting thinner over the course of the week the potential for exaggerated moves is very real. The default direction is still likely to be up, given past performance, but US indices have a lot of heavy lifting ahead of them to recover from the swift drop of Thursday and Friday.

Ahead of the open, we expect the Dow Jones to start at 17,248, up 120 points from Friday’s close.

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.