Greater London, England -- (SBWIRE) -- 10/01/2010 -- Joshua Raymond, Market Strategist, City Index (http://www.cityindex.co.uk) commenting on 28th September:

“The FTSE 100 posted small losses on Wednesday for the second straight session but afternoon trading saw the UK Index recovery from more severe losses of around 1%.

Point of Indecision
Today’s trading session is a perfect example of the fact that traders have reached a 'point of indecision'. There is not enough strong data out there to convince them to build upon recent gains but equally there is a general unwillingness to cash in existing positions. Until one side wins out, the markets are likely to continue to drift sideways within their current trading ranges.

It’s been a rather topsy turvy day on the FTSE 100 with the market recovering sharply from heavier losses to trade near flat territory in time for the US market open. However, a worse than expected fall in US consumer confidence forced the UK Index back towards the day’s lows before a min revival helped to minimise equity losses.

It is proving rather difficult to gauge sentiment right now. It seems that traders are clinging to the prospects of further stimulus injections from the Fed and Bank of England and paying little attention to today’s worst US consumer confidence data since February and concerns over Ireland’s debt sentiment.

Moreover, Gold prices reached a new record high today with upside momentum in prices continuing and given the historically defensive nature that traders tend to flee to Gold for, this paints a picture that all might not well on the equity front.

The recovery in the afternoon’s session was led firmly by a charge higher in mining stocks, which benefitted from a weaker US Dollar and stronger Copper prices. We have seen solid gains for stocks such as Xstrata, Antofagasta and Randgold Resources today.

The Yen situation warrants extra attention too considering that it seems the recent intervention from Japan to weaken its currency has not resulted in a reversal of its current bullish trend. The Yen has hit a new one and a half week high against the US Dollar and we are now back below the 84 Yen level. If the Yen continues to strengthen against the US Dollar, traders are likely to been on their guard for any more Japanese intervention.”

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