FTSE momentum starts to struggle

The FTSE 100, having hit a two-month high, has subsequently run out of steam.

London
Source: Bloomberg

The early trading session in the FTSE fleetingly gave the bulls the hope that the equity index might be able to move into positive territory for the year.

European equity markets have benefited from the positive boost out of the Asian markets. Asian traders appeared nonplussed as debt rating agency Moody's again appeared to be playing catch-up with traders' thinking when it downgraded Chinese debt.

Considering the run that FTSE equities have enjoyed since the 12 February this mild sell-off will be taken in its stride, although tinged with disappointment that 6200 has proven to be too big a hurdle to clear at the first time of asking.

Better-than-expected ADP employment figures out of the US has failed to ignite optimists’ enthusiasm.

Sterling has spent the day clawing back some of its lost strength against the dollar, bouncing back up to the $1.4060 region. This momentary burst of bullishness will no doubt have a short life.

BlackRock has joined in with the chorus of City firms warning of the Armageddon should the UK depart the safety of the EU, a message that might carry a little more weight with Middle England if it were to come from firms out of the City.

In conjunction with equity markets, oil prices have enjoyed a resilient few weeks rallying from their early February lows. Once again, the unmistakable correlation between the oil price and the equity markets has been clearly shown. Today’s oil inventories of 10.4 million barrels added to the estimated total of over 1 billion barrels of global inventories. As much as a cut from the producers would trigger a market move, at these levels it would take months to unwind the reserves already being held.

FTSE 100 risers and fallers (as of 4pm)

 

Company % change Index points
HSBC Holdings +2.14 +7.49
Rio Tinto +3.63 +3.38
BHP Billiton +5.27 +3.21
Standard Chartered +5.8 +2.62
Shire +2.99 +2.59

 

Company % change Index points
Reckitt Benckiser -2.94 -4.85
GlaxoSmithKline -1.66 -4.45
BT Group -2.74 -4.43
Unilever -2.87 -4.25
British American Tobacco

-1.02

-2.98

 

The day ahead

Economic data:

1.45am – Caixin China services PMI (February): the services sector is expected to slip to a reading 51.27 from 52.4.

9.30am – UK services PMI (February): expected 55.78, prior 55.6.

1.30pm – US jobless claims: jobless claims is anticipated to fall from 274,000 to 272,000.

2.45pm – US services PMI (February): the consensus is for a reading of 49.8, down from 53.2.

3pm – US ISM non-manufacturing (February): the forecast is for non-manufacturing to fall to 53.45 from 53.5

Corporate reporting:

UK: Domino's Pizza Group, Travis Perkins, Carillion, Admiral Group, Aggreko, Schroders, CRH

Europe: Adidas, Allied Irish Banks

US: Hewlett Packard Enterprise Company

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