City Index’s financial spread betting experts have extensive experience of the financial markets to share. Here, Head of Equities Giles Watts gives his daily market commentary for 18th November.

Greater London, England -- (SBWire) -- 11/22/2010 -- Giles Watts, Head of Equities at spread betting provider City Index (http://www.cityindex.co.uk), giving his market update for 18th November:

Equity markets posted strong gains mid-morning due to a combination of better than expected results and an increasingly likely bailout of Irelands debt-laden banking sector.

UK Equity markets appear to be retracing Tuesdays sell off following yesterday’s day of indecision. The FTSE100 added +72 points (+1.26%) from Wednesday’s close due largely to strong Mining, Oil & Gas and Financial stocks. The broad positive sentiment appears to reflect investors’ willingness for an outcome to the Irish banking saga.

The FTSE100’s biggest gainer was SAB Miller, which added +98.5p (4.8%) following a strong half-year update. SAB Miller, the world’s second-biggest brewer by volume, beat analysts’ estimates after confirming adjusted earnings rose 19% to $1.45bln, from $1.24bln in the same period a year earlier. Investors and analysts also seem happy with SAB Millers growth potential due to emerging markets exposure. Credit Suisse upgraded its price target to 2300p from 2200p following the company’s first half update.

Mining stocks also posted good gains following strong metal prices. Rio Tinto added +113p (2.76%) to 4261p, Xstrata added +31p (2.32%) to 1342 along with good gains in Vedanta (+2.7%), Eurasian Natural Resources (+2.65%) and Kazakhmys (2.45%). The UK Mining sector was accountable for around 16pts of the Index move.

UK banks sought solace in the likely bailout of Ireland’s troubled banks. Representatives from the IMF, ECB and European Commission today descended on Ireland’s banking sector, with the likely outcome being financial assistance in one form or another. Irish Life and Permanent yesterday confirmed that a jaw-dropping 11% (660mln) of deposits were withdrawn by corporations in only a few weeks at the end of the summer.

With numbers like that it appears inevitable that Irelands creaking banking sector will need financial assistance sooner rather than later. This potential outcome seemed to strengthen UK banks who, RBS especially, have exposure to Ireland’s wobbling banking sector. HSBC, the UK listed bellwether, added +10.5p (+1.6%) to 671p, which accounted for 7 points of the overall Index move. The remaining constituents of the banking sector also all posted good gains in hope of an outcome to this ongoing ‘crisis’. Lloyds was up +2.26%, Barclays up +2%, Standard Chartered +1.76% and RBS up +1.61%.

The market seems content around these levels for this morning session. Investors seem happy to have made good headway into Tuesdays sell off whilst it awaits any news from Ireland. Also, looking to this afternoons session, European markets seek consolidation in this morning’s move from the US market. If European equity markets are to push on from here investors will being looking for positive indicators from the US.

With US Initial Jobless Claims at 1.30pm (GMT) and Leading Indicators at 3pm (GMT) positive data would give Equity markets good ground for consolidation around these levels before looking for more upside. Any negative outcome and we could well see some of this morning’s gains given up towards the close.

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