Greater London, England -- (SBWire) -- 11/03/2010 -- Joshua Raymond, Market Strategist, City Index (http://www.cityindex.co.uk) commented:
“European Indices lost ground on Friday as investors eyed the all important first reading of third quarter US GDP.
Generally we have seen traders turn more cautious by removing elements of risk from their portfolio’s as we head into the afternoon and the important US GDP figure. There is a slight worry that US GDP could track a similar tone to that of the UK’s third quarter GDP announced earlier this week by proving to be more resilient than anticipated. This could have a knock on effect to the amount of stimulus the Fed may be looking to announce next week.
The morning trade has been a battle between strength in energy firms and mining weakness. With mining firms falling by over 2% in early trading, this is weighing on the gains energy firms have posted thus far contributing to a fall of as much as 30 points on the FTSE 100 this morning.
Most of the gains in energy firms have been dictated by the recent strength in earnings posted by Shell, Exxon Mobil and Total. To add to this, BP shares have nudged higher after a US Presidential panel said that Halliburton, a contractor for BP in the Gulf of Mexico, used flawed cement in the infamous Macondo well blowout.
Weighing on European Indices however is the mining sector, which is suffering from the stronger US Dollar and falling metal prices. This is also a sector that could potentially be under threat of a sell off should US GDP rise more than expected this afternoon, as this could rally the US Dollar which would pressurize metal prices further. As such, we have seen investors recycle funds out of the miners today as a precaution.”
For more on trading financial spread betting, visit http://www.cityindex.co.uk/spread-betting/.
About City Index
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative spread bet tools with transparent pricing, competitive spreads, and a high standard of customer service and support.
Contracts for differences (“CFD”) trading and spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.
Financial Spread Betting News: European Stocks Lose Ground Heading Into US GDP
Spread betting guru Joshua Raymond of City Index provides his EU Market Update for 29th October