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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Citigroup results eats into FTSE rally

Article By: ,  Financial Analyst
January 17, 2012 5:00 PM

A disappointing set of results from major US bank Citigroup ate away the FTSE 100’s earlier 1% gains in afternoon trade, after a strong morning session that was led by resources after China’s GDP slowed less sharply than had been anticipated.

The FTSE 100 closed higher on the day by 36 points or 0.65% led by gains in mining stocks.

The data out of China in the early part of this morning helped to put European equities on a positive footing at the start of trading, with Chinese GDP slowing less sharply than expected to 8.9%, calming fears over a sharp slowdown in global growth and increased investor appetite for risk. The Chinese GDP figure gave an immediate lift to mining stocks which, having a heavyweight influence on the FTSE 100, helped to push the UK Index higher by as much as 1% on the day by 10am.

A big jump in the German ZEW reading in the morning session also locked in the positive trading session, with the ZEW figure bouncing from -53.8 to -21.6, when the figure had been expected to rise marginally to -50.

Citigroup miss eats in FTSE’s gains

However, the FTSE’s charge faltered somewhat in afternoon trading after major US bank Citigroup disappointed investors by reporting an 11% fall in profits, missing consensus estimates as trading revenue continue to weigh.

The firm saw a net income of $1.2bn or 38 cents a share, which badly missed the majority of forecasts of 46-48 cents a share, and fell from $1.3bn a year earlier. The Citigroup numbers, whose shares price traded down by over 5% on the day as US trading returned after the Martin Luther King holiday, triggered profit taking in financial stocks in Europe, with the FTSE 350 banking sector retracing from earlier gains of 2% to close with gains of 1.1%. This is were much of the afternoons stumble in the FTSE 100 was triggered from.

Citigroups earnings will keep investors on edge now with Goldman Sachs due to report their respective earnings tomorrow and Morgan Stanley later in the week, particularly as many investors use US banking earnings as bellwethers for European earnings prospects.

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