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Home Markets Markets FTSE 100: Nothing stopping the market
FTSE 100: Nothing stopping the market PDF Print E-mail
Written by Will Peters   
Wednesday, 10 March 2010 17:41
Investors continue to buy up bankers and mining stocks.



FTSE 100 (INDEXFTSE:.FTSE) close higher by 0.68% at 5,640.57 points on Wednesday the 11th March.

"It seems like there’s nothing to stop the market at the moment with investors content to continue buying, filling their portfolios with risky assets such as mining and banking stocks.  

"Just when it looks like the market is set for a pull back, it defies the bears and pushes higher.  Clients have been expecting some profit taking at these levels taking out short positions and as a result many of them are licking their wounds," says Angus Campbell, Head of Sales, Capital Spreads.
 
Earlier this morning it looked like we were in for another round of sideways and directionless action, but US indices provided some upward momentum when they opened in the afternoon.  

The FTSE continue to lead the way once again and has breached near term resistance levels to record new highs.  

When compared to its European and American counterparts, who are yet to record new highs for 2010, the London market is looking much stronger.

One of the key factors driving the FTSE 100 higher could indeed by the depreciated British Pound.

The British Pound has lost a significant degree of value against the US Dollar in particular over the course of the past 2 weeks, ensuring UK stocks sell at a discount.

Indeed today it has been a back-and-forth day for the pound and dollar, as earlier in the trading session poor fundamentals drove the GBP to levels not seen since the first couple of days of March.

Industrial production in the UK fell 0.4% after posting 0.5% growth the previous month, feeding in from an awful manufacturing production figure of -0.9% and setting the expectation of slightly slower growth this month.

"However, when the actual came out as the inverse of the 0.9% growth posted last month, the slide began for the GBP. In a nod to technical analysis though, particularly Fibonacci followers, sterling did find support at an exact 78.6% retracement of the move from March 1 to March," says Dan Cook at IG Index.

Since bouncing off that support level, the GBP has been able to take back almost 100 pips of its earlier losses.

It is too early to tell if this same support level will hold if tested again, but for the moment the pound has been firming.
Last Updated ( Wednesday, 10 March 2010 17:43 )