European Indices recover from lows as crude oil consolidates from highs

European markets staged a recovery in trading to recover some of the heavier equity losses suffered in the morning session as traders started to buy back into equities, having seen the price of crude oil consolidate from its daily highs.
A strong ADP employment report, which showed that the US private sector added more jobs than the market had expected has also lifted optimism that Friday’s non-farm payrolls could equally surprise to the upside, and this has supported buyer demand into the market close. Private employers added 217,000 jobs last month compared to the market consensus of 175,000.

But the question on all traders’ lips right now is the price of crude oil and how much it is likely to pressurise corporate earnings if it stays at new yearly highs. It is the price of crude oil that traders are reacting to with a high degree of sensitivity lately and as such, consolidation of prices appears to settle the markets somewhat whilst spikes higher, as seen over the last 48 hours, triggers a particularly sharp downward move for equities. Market moves are proving to be much more volatile to the downside than the upside lately, and this emphasises the fragility of market sentiment right now with crude oil prices trading near yearly highs.

The FTSE 100 has bounced from support levels of around 5860-5865 for the second time in the space of a week to keep the FTSE 100 from re-approaching its December lows of 5812.

Much of the market rebound in the afternoon session today was a direct result of a recovery in prices for shares of mining companies, with the mining sector, which has rallied from morning losses of 2.6%, to trade back into positive territory towards the close, marking quite a turnaround.

One of the shining lights behind today’s trading session however has been results from Standard Chartered Bank and ITV. Standard Chartered did much to reaffirm shareholder confidence by reporting a record start to the year with particular successes in key emerging markets such as China and India. The bank also reported that revenues should be at the very least 10% higher this year. This has helped to curb the bearish trend the firm’s share price has been locked in since the end of last year. Standard Chartered shares were the top performer on the FTSE 100 today, rallying 4.5%.

ITV also gave shareholders a significant boost by reporting earnings for the year that had doubled, beating market expectations. The company had started the year well, seeing a recovery in advertising spend. Net advertising revenue rose 12% in the first quarter and is expected to rise around 10% in April. The broadcaster also announced that it was planning on reinstating its dividend, a move that was always likely to be heralded by shareholders. The reaction in the financial markets to these results has been one of bullish rejoicing with shares racing over 9% higher to levels not seen since November 2007.