Greater London, England -- (SBWIRE) -- 09/21/2010 -- Joshua Raymond, Market Strategist at spread betting provider City Index (http://www.cityindex.co.uk), commented:

“European Indices continued to prove rather lacklustre on Thursday with movement in prices limited to small ranges as investors remained happy to sit on what they have.

We have key Indices near significant resistance levels and traders are watching with bated breath to see if markets can push on and break out of their current ranges. If they do so, there is every chance that September could maintain its unusual bullish form to be a very good month for equities but there is a big question mark on this.

For this to happen, traders are looking for a breakout of 1130 on the S+P, 10700 on the Dow Jones and 5610 on the FTSE 100. These are big levels though and this is why with Indices around 1% away from these target levels traders are not adding more risk to their portfolios in case there is not a breakthough.

It is the energy sector that has kept the FTSE 100 near flat territory today, with the sector outperforming the Index by rallying over 1%. Strong price action in the share prices of BP, Royal Dutch shell and Cairn Energy, which have all rallied around 1%, is keeping the FTSE 100 from suffering a greater fall. Most of the weakness has come from the mining sector, which is suffering from weaker Copper prices.

UK retail sales unexpectedly fall triggering sterling weakness
UK retail sales unexpectedly fell in August for the first time since the start of the year, triggering selling in the pound sterling and a minimal escalation of earlier weakness in the FTSE 100. Traders did however buy into the knee jerk weakness in the pound which has helped to curb the fall in sterling somewhat.

Today’s surprising fall in retail sales is a rather unwelcome contrast to the optimistic and bullish viewpoint of Next, who delighted the retail sector earlier this week with resilient figures and outlooks. Were it not for the Next update perhaps today’s drop in retail sales could have caused more severe damage for retail stocks and the FTSE 100.

The fall in retail sales could also be a shot across the bow for those who fear resilient consumer demand is starting to weaken and will be significantly impacted by the forthcoming government spending cuts. Time will tell of course but traders are likely to want to see further evidence of a consumer slowdown before making any sincere reaction.”

Learn more about spread betting on indices at http://www.cityindex.co.uk/range-of-markets/indices-spread-betting.aspx

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