Greater London, England -- (SBWIRE) -- 09/27/2010 -- Stay informed of market-moving events with City Index’s spread betting insights
Joshua Raymond, Market Strategist, City Index commenting on 22nd September 2010:
““European stocks turned lower on Wednesday as investors started to exit long positions fearing a sell off after the Fed continued their ‘sit on the sidelines’ stance. There had been some hopes that at the very least even if there was no movement in quantitative easing or interest rates, the Fed would clarify the measures that they would look to introduce should the recovery worsen.
I get the feeling that today’s fall in prices is more of a knee jerk reaction to those traders who were perhaps overly optimistic as to what to expect from last night’s Fed decision.
As well as traders downsizing positions we have also seen a number of short positions come into the markets in late trading yesterday and early this morning. Having said that, the number of short positions on the FTSE has already significantly decreased over the last few hours which convinces that clients may not be expecting a dramatic sell off at present.
In the UK we have the key energy and banking stocks weighing on the FTSE 100 Index. Today’s trading would be significantly worse had it not have been for strength in the miners, which is outperforming the Index so far. We have seen decent demand for stocks such as Randgold Resources, which continues to benefit from record high Gold prices, and other key miners such as Xstrata and Lonmin.
We have seen selling in the insurers after BNP Paribas issued a downbeat note for the sector highlighting limited upside potential and a number of challenges that key insurers in Europe will face over the next few years. The note has damaged investor confidence in insurers somewhat and they have sold out of the insurers as a reaction to this.”
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