News Column

CORRECT: MARKET COMMENT: Markets Relax In London Sunshine At End Of Strong Week

July 4, 2014

Jon Darby

(An item published at 1216 BST misstated one of the team's in the football game. The correct version follows.)

LONDON (Alliance News) - The FTSE 100 is flat-lining into the weekend in low volumes Friday, with Wall Street closed for the July 4 holiday and little in the data calendar to provide any further boost at the end of what has been the most positive week for equities in more than two months.

Early afternoon Friday, the FTSE 100 is broadly flat at 6,863.98, while the FTSE 250 is up 0.4% at 16,096.90, and the AIM All-Share is fractionally higher at 790.54.

The blue chip index is trading near to its recent highs, having risen 1.6% over the week so far, on the back of improving economic data from the world's largest economies. An improvement in Chinese PMI data earlier in the week provided a boost the mining sector, while Thursday's US non-farm payroll report provided a general boost to investor sentiment as it indicated that the US economy may well be rebounding strongly from the winter slump.

US non-farm payroll employment rose by 288,000 in June, meaning that over the past 3 months, job growth has averaged 272,000 per month. The headline rate of US unemployment also fell unexpectedly on Thursday to 6.1% from 6.3%, marking the lowest level since September 2008.

The bumper US jobs report, released ahead of the long US weekend sent global markets up near to, or even through, all-time highs. The DJIA closed Thursday above 17,000 points for the first time in its history, prompting analysts to look towards the next milestone. "Let the countdown to Dow 18,000 commence," Rabobank said in a morning note to clients.

It took about seven months for the DJIA to get from 15,000 to 16,000, and about five months to get from 16,000 to 17,000. "So will we see the next 1,000 points added by September?" asks Rabobank analyst Michael Every.

The US markets won't be making any progress Friday, however, as they remain closed for Independence Day celebrations. While the European markets are open, trading is muted ahead of the Wimbledon semi-finals, as well as the World Cup clash between France and Germany later in the day.

"With the sunshine blazing down on London, the temptation to wrap things up in a quiet fashion and salute American Independence Day with an early beer will be too much to resist for some," says IG market analyst David Madden.

The major European markets are marginally lower, with the German DAX and the French CAC both down about 0.1%.

With nothing left in the data calendar, trading is equally calm in the major currency pairs. The dollar is slightly firmer across the board, with the pound currently trading at USD1.7146 and the euro at USD1.3589.

Within the UK stock movers, the airlines lead the gainers after easyJet said it saw more than a 10% rise in passenger numbers year-on-year in June. The stock is up 2.2%, with International Consolidated Airlines following, up 1.0%. Sports Direct International is the biggest blue chip faller, down 1.3%, consolidating from its near 6% gain on Thursday.

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Source: Alliance News

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