FTSE's 6000 level holds for now

In mid-morning trading, the FTSE 100 has managed to stabilise after recent falls, gaining 50 points.

It seems that the rush for the exits has come to a halt for now, but, like the proverbial parrot, this bout of risk aversion may not be dead, but just resting. It is still a struggle to work out the real outlook for markets, since the dust kicked up by last week’s Fed meeting will take weeks to settle. The Fed might be supposed to remain aloof from market panic, but it cannot have escaped them that the reaction to their upcoming policy changes has been less than positive.

The FTSE 100’s 6000 level has held for now, which will come as relief to many who had watched the markets press relentlessly lower over the past month. Both banks and miners are in better form so far this morning, looking to take back some of their China-inspired losses. A rally of a thousand points begins with a single step, but it would take a brave person to suggest that the bottom is now in and that the only way is up once again. Oil firm Petrofac has reported that it is expecting an upturn in the second half of the year, a case of ‘jam tomorrow’, rather than ‘jam today’ but the strong pipeline of deals does suggest that the company will continue to deliver the goods.

With lots of economic data on the calendar today investors will have plenty to think about, which at least gives hope that we can try to put all the excitement of last week behind it. Durable goods, new home sales and consumer confidence will dominate, but the question will be whether US markets can continue their bounce from late last night and follow their European counterparts higher from here. Ahead of the open, we expect the Dow to open 80 points higher, around 14,740.

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.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.