Greater London, England -- (SBWire) -- 11/12/2010 -- Joshua Raymond of spread betting provider City Index (http://www.cityindex.co.uk) commented on 9th November:
“European markets posted gains of as much as 0.5% to recover all of the ground lost yesterday after strong earnings from major firms Vodafone and Barclays helped to cheer investors.
However, gains sold off somewhat in the afternoon session after the US dollar gained in strength forcing risky asset classes such as heavyweight equities slightly lower.
Lingering doubts over Ireland’s debt problems also injected a bit of caution into the markets.
Technical charts are pointing to continued strength in equity markets which could continue towards a strong year end run as long as investors can absorb any potential shocks particularly those that may come from the European sovereign debt crisis. There’s an old saying that ‘the trend is your friend’ and with Indices having been in a firm bullish trend since the end of the summer, helping to push the FTSE 100 higher by some 15% in the process, it could be quite a risky ploy betting against this market at present.
Corporate earnings lift FTSE
Vodafone is seen as a bellwether for global outlook and having announced today that it was raising its profit outlook and had agreed to sell its £3.1bn interests in SoftBank, this has lifted more optimism for investors.
To add to this, Barclays reported a big improvement in bad debts, which have fallen by almost 30% this year and this was better than many had expected to see. Weighing on sentiment in Barclays was the fact that profits was hit by a poor performance at its investment wing Barclays Capital, though many investors had expected this having seen similar problems at the banks US peers.
Miners lead charge
In what has become a familiar saying over the last few months, much of the FTSE 100’s charge towards a new 29 month high today has been dictated by strength in mining stocks, which have been boosted by continued weakness in the US dollar. That said, the miners did sell off towards the close as the dollar recovered and this took the shine off an otherwise bullish performance for stocks such as Xstrata and Kazakhmys.”
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Financial Spread Betting: European Markets Close Higher on Corporate Earnings and Strong Mining Performance
Spread betting guru Joshua Raymond gives his insights on the markets for November 9th.