All trading involves risk. Losses can exceed deposits.

FTSE likely to spend day in the red

Ahead of the European open, the Japanese Nikkei has closed down 6.35% on the day, and is now more than 20% shy of its year highs.

All trading involves risk. Losses can exceed deposits.

The confirmation of a bear market in Japan will have given equity traders around the globe a surprise, especially with the amount of government fiscal intervention that has occurred in the last six months.

The growing importance of the Japanese markets as far as early morning sentiment is concerned has meant that the FTSE has fallen with it. This morning we have seen the FTSE hit the 200-day moving average; a close below this would likely trigger a change of mentality for many investors. Although we have seen a certain amount of buying on the dip, the volumes of business have been very thin.

As far as the FTSE equities are concerned, the overnight news that RBS CEO Stephen Hester will resign before the end of the year has shaken the markets. Although there are still questions to answer, it appears that the guiding hand of the government has overseen this change. With markets so jittery and confidence delicately balanced, announcing the departure of your CEO without having a replacement already organised was always likely to see the market react; consequently, in the first two hours RBS shares were off 5.72% on the day.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.