Greater London, England -- (SBWIRE) -- 09/28/2010 -- Joshua Raymond, Market Strategist, City Index (http://www.cityindex.co.uk) commented:

“We have seen a continuation from Friday’s late charge higher in European Indices to help the FTSE, DAX and CAC all post small gains in the morning’s session. A positive close in Asian trading this morning is keeping traders on the front foot, whilst Unilever’s acquisition of Alberto Culver for $3.7bn is also supporting general sentiment today.

There is nothing significant out in terms of economic data today and so we are largely relying on technical levels, M&A and broker recommendations to drive stocks on.

On the M&A front, Unilever’s deal for Alberto Culver is certainly giving stocks a positive lift to sentiment. There remains a large degree of apprehension amongst investors as to the strength of the global economic recovery and what the Unilever deal does help to do is breed a bit of confidence that the corporate front still looks healthy and that companies could continue to look towards M&A to drive growth. Unilever’s shares have jumped to the top of the FTSE leader board on the back of the deal announcement.

That said, from a technical perspective, Septembers bullish form has been slowly running out of steam the closer we approach key resistance levels and the FTSE is currently hitting a roof around the 5610-5635 mark. The UK Index needs to close above the 5635 level if we are likely to see more upside.

In a market devoid of much fundamental news or economic data, much of the individual equity moves has been dictated by changes in broker recommendations. Whitbread shares have received a boost from an upgrade by Credit Suisse, whilst Invensys shares are also trading higher after Bank of America (BofA)/Merrill Lynch (ML) cited the firm as amongst their top picks for their sector. On the downside, a downgrade by BofA/ML has hit investor sentiment in Smiths Group this morning. The bank cited the engineering firms low market sales exposure in emerging markets as one of the factors behind downgrading their stance on the stock to neutral from a buy. We have seen traders sell out of positions in Smith’s on the back of this action from the broker.

Astrazeneca’s Zibotentan pill fails trial
AstraZeneca’s shares have fallen this morning after the pharmaceutical giants experimental prostate cancer pill Zibotentan failed a trial. Astrazeneca’s shares have fallen by 0.8% this morning as a result. Today’s share price fall is a relatively small amount and whilst investors will be disappointed by the failure, initial sales projections for the drug of $189m in the next 4 years is not a massive setback for the firm, particularly given the risky nature of the product. Therefore traders are not too disheartened by the setback.”

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