23rd Sep 2013 09:58
LONDON (Alliance News) - London's main equity indices are all trading close to flat, as markets continue their stabilisation after the big gains last Thursday.
Commentators at Accendo Markets suggest that the euphoria caused by the US Fed's decision to continue to provide easy money may have already evaporated, as the FTSE 100 falls below the 6,600 mark, a psychological level that had been broken in the aftermath of the FOMC's decision not to taper its monthly USD85 billion quantitative stimulus. The FTSE 100 now trades at 6,593.9.
Investors across Europe remain cautious as German coalition tussles begin. Sunday's German elections resulted in Chancellor Angela Merkel and her conservative political bloc emerge as clear winners. However, as votes came in marginally under the required number for an overall victory, Merkel must now convince leftist rivals to form a coalition government. With the choice of an alliance with either the Green party or the Social Democrats, discussions could trigger some nervousness in the markets. The last coalition with the Social Democrats collapsed in 2009.
At an individual stock level, industrial metals and mining companies are among the biggest fallers of the FTSE 350 sectors. The weak price of gold is having an adverse affect as it drops 0.3% to USD1321.60 per ounce. Randgold Resources, down 2.7%, and Fresnillo, down 2%, are two of the biggest blue-chip fallers.
Ariana Resources has jumped 54% after it announced that it has discovered four highly mineralised gold-silver zones. The discoveries were made at its Red Rabbit Gold Project in western Turkey.
A slew of PMI data from across Europe has been released this morning.
French private sector business activity rebounded in September, led by an improved performance in the country's service sector. The services activity index climbed to a 20-month high of 50.7 from 48.9 in August, ahead of consensus forecasts cited by FXstreet.com of a climb to 49.3. However, the manufacturing PMI fell to 49.5 in September from 49.7 in August, below the expected jump to 50.1. Although French employment continued to decline across the private sector, the rate of job shedding was the slowest in the current 19-month period of decline.
The eurozone private sector recovery further strengthened in September on the back of a strong upturn in services. EU services PMI rose for the second month running, jumping to 52.1 from 50.7, exceeding expectations cited by FXstreet.com of 51.1. However, manufacturing PMI data fell to 51.1 from 51.4 in August, missing the anticipated rise to 51.7.
PMI figures from Germany saw an increase to 54.4 from 52.8 in August, ahead of a forecast of 53.1, according to FXstreet.com. German manufacturing PMI fell to 51.3 from 51.8, missing expectations of a rise to 52.2.
Still to come in the data calendar Monday, Chicago federal national activity index data is released at 1330 BST, ahead of Markit US manufacturing figures at 1358 BST. European Central Bank President Mario Draghi is set to provide the introductory statement at the European Parliament's Quarterly Hearing in Brussels at 1400 BST.
By James Kemp; [email protected]
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