Greater London, England -- (SBWIRE) -- 11/01/2010 -- Joshua Raymond, Market Strategist, City Index commented:

“The pound accelerated higher after data from the Office of National Statistics showed that UK GDP slowed less harshly than expected in the third quarter, giving sterling buyers a lift that the Bank of England will now be less likely to announce quantitative easing at least in the near term.

On the back of the better than expected GDP number we saw traders come in to buy sterling, which immediately rose as much as 60 pips against the US dollar and 50 pips against the Euro. The GDP number pose a big threat towards those that had hoped the Bank of England would announce their own second round of quantitative easing next month, not simply because it showed more growth than predicted, but more so down to the fact that it smashed all expectations with growth double that of market consensus.

Miners and Insurers the key drags
On the broader equity markets, it is the miners and insurers who are the main drags on the FTSE 100. The mining sector has suffered from some profit taking, having been the lead gainer yesterday and weaker copper and gold prices has only facilitated more profit taking in this sector.

The insurers are also fairly weak today after Bank of America/Merrill Lynch cut its rating on a number of firms in the sector. Legal and General shares being worst hit after the US firm cuts its stance to ‘neutral’ having had a buy rating on its shares. Other firms hit by BofA/ML re-ratings were Standard Life and Old Mutual.

Banks led lower by UBS numbers
UBS numbers have weighed on European banks today after the Swiss bank endured a 406m Swiss Franc loss at its investment bank. The loss suffered has weighed on what might have otherwise been cited as a decent set of numbers where client outflows stopped for the first time since early 2008.”

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