Familiar friends return to stalk markets

Greece and China are back at the top of the news agenda, with the latter hitting UK mining stocks hard.

City of London skyline
Source: Bloomberg

The reopening of the Athens stock market this morning, after a period of some five weeks, is the main show today; the sharp drops seen so far are dramatic, but really reflect investors playing catch-up following the remarkable events of the past month. Having been shut out for so long many will simply be keen to escape from Athens as quickly as possible and find havens for their money that do not require being on ‘crisis watch’ all the time.

Meanwhile, fresh falls in China and weak PMI figures from that nation act as a reminder that we should now expect volatility as standard in China, both in stock market and economic terms. Throw in downward-trending GDP numbers and an interventionist  government that is actively hunting short-sellers, and investors could be forgiven for being as unenthusiastic about China as they are about Greece.

Judging by the calm reactions to the slew of data we’ve seen this morning it would seem that the markets have moved firmly into the languid summer period. HSBC shares are providing a modicum of excitement, but with most of the big news already in the price most investors are content to sit back and await developments. Having seen a modest bounce last week the mining sector has taken a distinct turn for the worse today, with big names under heavy pressure thanks to the dire news from China.

Last week saw the FTSE 100 comfortably outpace its rivals, but reality has struck back today as the raw materials index looks to make fresh lows for the year. US PMI numbers this afternoon should provide  some direction, but the drift lower in US indices looks set to continue for the time being. Ahead of the open, we expect the Dow Jones to start at 17,686, just a shade lower from Friday’s close.  

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.