Investors pause for breath somewhat after last week s surge

European Indices traded into small gains on Monday as investors paused for breath somewhat after last week’s strong index gains of 5%. It’s Independence Day in the US today, which means that US markets will be closed and this could also keep European markets relatively mundane today. Though with expected lower volumes, there remains the potential for somewhat exacerbated equity moves.

The FTSE 100 opened to small gains of 0.1%, whilst European Index peers the DAX and CAC traded largely flat in the first hour to trading for the new week.

We have the Fourth of July holiday in the US, and an intense calendar of economic data to come this week including an expected ECB rate hike on Thursday and US non farm payrolls on Friday. After the very bullish price action of last week, which saw the FTSE 100 gain some 5% in six consecutive days of positive sessions, it can be understandable that traders may be slow to return to their trading screens today.

Standard and Poor comments on Greece keeps tensions high
We have seen investors look to take profits from their positions in UK banking stocks this morning however, with the sector falling 0.6% and subsequently weighing on the FTSE 100 Index from adding more gains. The sector was one of the bright sparks to trading last week as investors hunted risky asset classes on positive moves in Greece and european partners to help the indebted nation stave off an immediate default. The comments from ratings agency Standard and Poor that the rollover of debt to Greece, despite the voluntary nature of it, could be classified as a selective default, has triggered the profit taking in banks somewhat.

Despite there being a seeming agreement between the EU, IMF and French and German banks to pave the way for Greece to receive a second bailout, the reactions of ratings agencies is still rather unpredictable. And the comments from the Standard and Poor concerning a selective default are likely to keep tensions high surrounding Greece and its peripheral debt laden countries in the near term.

British Land leads on comment
In terms of the individual stock movers, we have seen buyer interest in British Land in reaction to a positive broker note from Deutsche Bank, who told their clients to buy its shares in anticipation of strong net asset value growth. Playing to music to the ears of the firms shareholders, the bank said “we expect the group’s share price to appreciate considerably over the next 12 months owing to anticipated strong NAV growth and an expected upward re-rating in the valuation of the shares.” British Land shares price has risen oer 2% straight to the top of the FTSE 100 in reaction to the note.