Spread Betting Indices- FTSE hits new 6 month high as investors hunt commodities

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Spread Betting Indices- FTSE hits new 6 month high as investors hunt commodities Powered By Docstoc
					Joshua Raymond, Market Strategist with spread betting provider City Index, gives his
EU market update for October 25th
  Joshua Raymond, Market Strategist, City Index (
  鈥淓 uropean shares surged on Monday as investors hunted commodity related
stocks after the weekends G20 meeting failed to outline exactly what measures
countries must adopt to stop competitive currency devaluations. As a result, traders
continued to sell out of the US Dollar this morning, forcing the prices of Nymex
Crude Oil, gold and copper all higher, which spurred strong demand for heavyweight
mining and energy stocks helping to push the FTSE and other European Indices
higher by 0.6%-0.8%.
  Traders are seeing the weekends G20 statement on preventing currency devaluations
as nothing more than hot air. Without a set of public guidelines it is hard to see traders
convinced that member states will put an end to the manipulation of their own
currencies to maintain healthy export demand. The calls from the US in particularly
have been viewed by some in the market as rather hypocritical particularly
considering the much publicised clues the Fed have given the market lately that they
will announced a second round of quantitative easing next week, which in itself is
keeping the dollar weak. For now therefore, the trend of dollar selling is still very
much intact.
  Miners charge the FTSE higher on weak dollar As the trend of dollar selling is still
firmly intact, this has meant the bullish miner 鈥檚 trend remains intact also, which is
helping to underpin gains in European Indices. The mining sector in London is higher
by some 2.7%, charged firmly by string gains in miners Antofagasta, Kazakhmys and
Xstrata. Indeed it is hard to see a company outside of the mining sector in the top 10
rising stocks on the FTSE 100 today. The sector itself is only a little over 1% away
from hitting a new 27 month high and this just reaffirms how much of the recent
FTSE 鈥檚 strength has been driven by commodity related stocks.
  Economic data and Bernanke speech eyed Indices are set to remain particularly
sensitive to economic data this week with Existing Homes Sales from the US set to be
announced later this afternoon, whilst the first reading of Q3 UK GDP tomorrow will
be watched intensely by traders. A speech by Ben Bernanke, the Fed Chairman, this
afternoon will also be viewed by many market participants looking for clues as to the
scale of next week 鈥檚 anticipated announcement by the Fed of further asset
purchases or 鈥楺 E2 鈥? Lloyds falls on Credit Suisse price target cut On the
downside, Lloyds Banking Group shares have slumped 2.2%, making it the worst
performing stock on the FTSE 100 today after investment bank Credit Suisse cut its
price target on the shares. The bank cut its price target 9% to 79p citing the potential
negative effect from falling property prices on revenues whilst near term capital return
is viewed as limited.鈥?
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