FTSE hesitates to follow climbing US markets

In mid-morning trading the FTSE 100 is up just seven points, as markets try to digest ECB president Mario Draghi’s comments.

Across the Atlantic, US markets are doing their best to drag Europe into a more bullish mind-set. And with the Dow closing at record levels, above 16,000, the early indications are that we will follow suit. However, before we can feel too confident about the FTSE 100 closing higher, the two hurdles of ECB president Mario Draghi's statement and the all-day eurogroup meeting need to be cleared.

Ofgem has finally decided to bare its teeth. It has told five of the six firms supplying electricity that they need to rework their policies, as they are not offering 'value for customers'. This follows a widespread public outcry after the energy providers made unilateral price increases. TUI Travel heads the FTSE fallers on news that Norwegian shipping magnate John Fredriksen has sold out his holding in the firm, although he has reinvested in TUI on the German exchange. UK-based restaurant and hotel company Whitbread has benefited from institutional upgrades, with JP Morgan now setting a 3720p target - up almost 12% from the previous level.

Last night the Dow closed above 16,000, firmly cementing the bullish stance of US traders. It appears that, after a little more reflection, markets have discounted the chances of tapering starting in December, disregarding the more hawkish tone of the last Federal Reserve minutes.

Without the heavy flow of macro issues hitting the markets today, this could be an opportunity for traders relax and round a busy week off on an optimistic note. The S&P 500 now has the 1800 level in its sights, and the NASDAQ will be gunning for the 4000 level. The prospect of all three major US markets closing out the week bullishly is not out of the question, especially as fears are beginning to subside. Ahead of the open, we expect the Dow Jones to start ten points higher at 16,020.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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