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FTSE 100 sees miners and banks play tug of war PDF Print E-mail
Written by Sam Coventry   
Friday, 12 March 2010 12:54
Further guidance on the FTSE 100 to come at 1:30pm when US retail sales data comes through.



The FTSE 100 (INDEXFTSE:.FTSE) is higher 0.27% at 5,632.43 at 12:36.

The index has been choppy following a tug of war between banks and miners. At 1:30pm we can expect high volatilty as the latest US retail sales data is released.

Banks were higher on the view that after talks, banking reforms in the United States could be watered down.

"The capital markets are healthier; the economy at least is purported to be on the road to recovery. So I think it has definitely taken some of the urgency out of the equation, and it's also taken some of the emotion out of the equation," NYSE Euronext CEO Duncan Niederauer told Reuters News yesterday.

In addition, US Senator Christopher Dodd, chairman of the Banking Committee, on Thursday said he would present his own version of a financial reform bill after compromise talks with Republicans stalled.

"This news fuelled gains across US banking stocks yesterday and sparked a banking rally in London this morning. Consequently, Barclays shares rose 2.1% to 351p, Lloyds Banking Group climbed 3.2% to 58.37p and Royal Bank of Scotland rallied 4.2% to 42.25p," reports Anthony Grech at spread betting providers IG Index.

HSBC underperformed the sector, however, falling 0.7% to 689.6p following declines in Hong Kong and data theft by a former employee at its Swiss private bank.

China’s stocks dropped the most in a week, as investors feared the government will tighten monetary policy to control inflationary pressures and avert domestic asset bubbles.

"There’s speculation that the reserve ratio or interest rates will be raised over the weekend," said Zhang Gang of Central China Securities Holdings Co.'The market is concerned that the government will act after this week’s NPC meeting," he said, referring to the ongoing annual legislative meetings of the National People's Congress.

"The predictable effects of prospective additional policy tightening in China on the country’s demand for commodities also weighed on FTSE-listed miners during the early morning session. Antofagasta, Anglo American, BHP Billiton and Xstrata were the sector's worst performers, down between 0.14% and 0.70%. Rio Tinto, Eurasian and Lonmin pared earlier losses, meanwhile, as the domestic banking sector rally reignited risk appetite," says Grech.


Last Updated ( Friday, 12 March 2010 12:57 )