Volatile morning for the FTSE 100 on quadruple witching day

It was a volatile morning session for the FTSE 100 on quadruple witching day, where futures and options expiries can trigger somewhat dramatic moves on the UK benchmark index.

The FTSE 100 was trading higher by 10am before contracts started to settle and this forced the index back from its highs immediately by around 40 points to trade back to flat on the day.

In truth, apart from the expiry of options, the day is likely to be somewhat lacklustre. After a really strong run in equities since the lows of June, the expiry may tell us something about how traders see equities trading over the subsequent months. If the expiry sees prices weaken, traders could use that weakness as a buying opportunity, especially considering the open endedness of the Fed and ECB’s easing programmes.

However, we will also likely start to see a better gauge of sentiment after the expiry today and whether investors are keen to buy into stocks with the same sort of aggression shown in previous weeks considering we have now seen the cards with which major central banks are playing.

From a sector perspective it is the miners that are giving the UK index heavyweight support, with gains in the sector of 0.5%. Take those gains out of the equation and the FTSE 100 would likely be suffering losses of around 0.3%. Oil and gas sector stocks have traded weaker too, despite the 0.7% gains seen in crude oil prices this morning.

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