29th Nov 2013 10:41
LONDON (Alliance News) - London's stock indices are all trading modestly higher in a quiet Friday morning session, while major European markets remain flat despite further positive data.
Meanwhile, the pound is slipping away from the yearly high against the dollar following disappointing UK lending data.
By mid-morning Friday the FTSE 100 is up 0.2% at 6,668.31, the FTSE 250 is up 0.2% at 15,466.21, and the AIM All-Share is up 0.1% at 823.22.
EU inflation and unemployment data has come in as a relief to many. Unemployment across the eurozone fell slightly to 12.1% in October, down from 12.2% in September. Inflation is also on the rise, with EU CPI coming in at 0.9% year on year in November, higher than the 0.8% expected and up for 0.7% seen in October.
The drop in October's CPI provided the catalyst for the surprise interest rate cut by the European Central Bank earlier in the month. Coming on the back of German CPI data, which also recorded a rise on Thursday, the tick up in inflation across the eurozone will go some way to allay fears of deflation in the currency bloc.
Italy still provides cause for deflation concern however. In the country that has finally manged to oust Silvio Berlusconi from front line politics, CPI came in as negative 0.4% in November, down from a positive reading of 0.2% in October.
The European data has done little to lift major European equity markets, with both the DAX and CAC40 trading almost perfectly flat, seeming to be waiting to find out what happens when US traders return to the markets for a short Friday session. While the US markets were closed all day on Thursday for Thanksgiving, they will open at the usual time today and close at 1800 GMT for an extended holiday weekend.
"We can expect this afternoon's session to be a rather more lively affair when the U.S markets re-open as investors seek to squeeze all their trading into a small window before heading into the weekend", said Spreadex Trader Max Cohen.
In the UK, fewer mortgages were approved in October than expected, with data from the building societies association showing 67,701 new mortgages were approved, missing consensus expectations of 68,500, although still a rise from the 66,891 approved in September and bringing approvals to the highest level since February 2008.
Net lending to individuals in October also was lower than expected, at GBP1.7 billion, down from GBP2.2 billion in September and lower than the forecast for GBP2.1 billion.
The disappointing lending numbers have taken the shine off the pound that has been rallying in the wake of the Bank of England's positive financial stability report on Thursday. Against the dollar the pound had been testing the yearly high of USD1.6380 but is now off a little at USD1.6325.
Within UK equities, a thin corporate calendar and the US holiday has led to a light-volume morning session. Experian is the stand out blue chip mover. The information services group is down 2.9% after being downgraded by Goldman Sachs to Sell from Hold. In a note to clients, Goldman said Experian's recent acquisitions, such as 41st Paramater and Passport Health, were too expensive, and the company's returns on investment are likely to come down, according to a market participant who has seen the note.
There are no primary data releases left in the data calendar for Friday, but the return of the US market this afternoon should see a pick up in volumes and volatility.
By Jon Darby; [email protected]; @jondarby100
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