FTSE falls in light trade as investors slowly return
The first trading day after the Christmas break saw the FTSE 100 make a brief break below the 6000 level in light volumes before returning […]
The first trading day after the Christmas break saw the FTSE 100 make a brief break below the 6000 level in light volumes before returning to a tight trading range of 6000-6020.
There is very little that can be interpreted from today’s session in truth, with the majority of traders and volumes likely to return next week in the New Year.
The most interesting part of the session thus far has been to see strength in the mining sector with traders putting the Chinese rate hike, announced on Christmas day, to one side and focusing on metal outlook. The rate hike by China was of no real surprise to the market and there is every chance that China could announce another 2-3 hikes in 2011 as part of their new prudent monetary stance to curb spiralling inflation. So far, the move to hike rates is being welcomed by the market as a move to ‘growth normalisation’ and this has helped the mining sector to rally higher by 0.6%.
Strength in miners is helping to counter balance weakness in banking stocks, which would have otherwise have forced the FTSE 100 lower this morning. Royal Bank of Scotland and Lloyds Banking Group are the main fallers on the FTSE with both shares losing between 1%-2%.
Crude prices continue to stabilise above the $91 level and this is helping to maintain demand for energy firms today. Expectations that crude inventories will show a decline in stockpiles is also supplementing gains in crude oil prices today, which is also helping to lift energy firms across Europe.
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