Greater London, England -- (SBWire) -- 02/23/2011 -- In his daily EU market update for 17th February, Equity Analyst Sean Power of financial spread betting and CFD tradingprovider City Index (http://www.cityindex.co.uk/) takes a look at the day’s market activity, including a second day of upward momentum for the UK equity market.

"A second day of upward momentum helped to push the UK equity market to its highest level since May 2008. The FTSE 100 briefly broke the 6100 level to post a high of 6101, before looking to retreat to parity by 9am GMT in a quiet early morning session. Miners and financial stocks propelled the index higher and helped to offset losses in BAE Systems. At 9am GMT the FTSE 100 was trading 1.6 points at 6086, with the DAX at 7413, down 1 point, and the CAC 40 2 points at 4153.

Miners were buoyed in early trading following an upgrade to overweight for BHP Billiton by Morgan Stanley. The world’s largest miner led the way in early trading, gaining over 1% to post a high of 2490p, 26p. Other miners followed suit giving the UK leading index the impetus to push toward the 6100 level.

Financial stocks also gave investors reason to celebrate Thursday morning with 1% gains for most constituents. RBS, Lloyds, Barclays and HSBC were all members of the top 10 risers in early trading as investors followed Evolution’s ‘Buy’ rating for RBS this morning. At 9.30am GMT RBS was trading 3.8% better on the day at 49p, with Lloyds 2.4% at 68.7p, Barclays 1.8% at 338p and HSBC 1.8% at 734p.

The biggest loser in early trading was BAE Systems, Europe largest defence company, who failed to impress investors and analysts alike with their full-year update. BAE traded to a low of 342.8p in early trading, -3.6% on the day, after confirming 2010 results failed to meet analysts’ expectations. Net income last year was £1.05 billion, missing the widely expected £1.13 billion figure. BAE also remained cautious over the outlook for 2011, stating that revenue will fall in the coming year as the UK government looks to cut military spending.

The first hour of trading had a very subdued feel to it, which was evident with the ease and speed at which the 6100 mark was reached and then retreated from. In quiet sessions volumes are thin and markets can make ‘false’ moves, which can be quickly reversed. With no real negative news at present the markets could continue to drift slowly upward. Unless there is any market moving news released during the remainder of this morning’s session, one should be wary of any excessive ‘false’ lurch in either direction by the market. Until the US trading session begins investors should trade cautiously given the quiet nature of today’s market."

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