4th Mar 2014 13:30
LONDON (Alliance News) - Major stock indices are continuing to push higher and are now broadly flat over the week so far, having retraced most of Monday's heavy sell-off.
The US market is expected to open in an even-more buoyant mood, with indices expected to erase all of Monday's losses at the opening bell.
Equity markets opened strongly Tuesday on the back of reports that Vladimir Putin had called Russian troops back from the border of Ukraine. Investor sentiment has since been boosted further after the Russian president held a press conference at which he said he sees no need to send Russian troops to Ukraine for now, calling it a "last resort".
Putin also said that the military exercises being carried out on the Ukrainian border had been planned for a long time and had now finished.
The FTSE 100 is now up 1.5% at 6,811.00, the FTSE 250 is up 1.6% at 16,631.50, and the AIM All-Share is up 0.4% at 886.11.
In Europe, the CAC 40 is up 2.4%, while the DAX 30 is up 2.3%.
Heading into the open of US stocks, futures trading indicates that the DJIA, the S&P 500, and the Nasdaq Composite all will open about 1% higher, erasing all of Monday's losses and putting the S&P 500 back towards the record high made at the end of last week.
"US markets look set to open higher this morning as investors take a break from the rampant selling that took place yesterday," said CMC Markets analyst Jasper Lawler.
Softer precious metal prices continue to see the mining stocks underperform Tuesday. Although the stock market is a sea of green, the FTSE 350 mining sector is up the least, gaining just 0.5% against the 1.6% gain of the whole market. Fresnillo is weighing considerably on the sector, down 10% after reporting a 65% drop in its full-year profits.
The only other FTSE 100 stocks in the red are Royal Mail - down 0.4% after Credit Suisse initiated coverage of the stock with an Underperform rating - and Randgold Resources - down 2.0%, retracing some of Monday's gains in line with the gold price.
Gold has continued to slide after Putin's press conference, currently trading at USD1,334.00 per ounce, down almost USD21, or 1.5%, from Monday's high. Silver is about 1.5% off its high, currently at USD21.15 per ounce.
Brent Oil remains below USD110 per barrel, down from a high above USD112 made on Monday amid concern of disruption of supply from Russia.
The pound has rebounded from earlier weakness after a disappointing reading of the UK construction industry. The pound fell below USD1.6670 after the UK construction PMI fell unexpectedly, but as the dollar softens across the board, with investors regaining their risk appetite, sterling has pushed back up to USD1.67.
The weaker-than-expected eurozone PPI date releases earlier seems to have had little affect on the euro ahead of Thursday's central bank meeting. The euro is also slightly higher against the dollar, currently trading at USD1.3765.
Still to come in the data calendar Tuesday, the US Redbook of retail sales is released at 1355 GMT, ahead of the New York ISM index of business conditions at 1445 GMT. Economists expect the index to drop to 63.2 in February, down from 64.4 in January. The economic optimism index, released by The Investor's Business Daily and the TechnoMetrica Institute of Policy and Politics is scheduled at 1500 GMT.
However, "the key US event is the Senate confirmation hearing on the Federal Reserve nomination of Stanley Fischer to the vice-chair and Jerome Powell and Lael Brainard to the Fed Board," says Jonathan Thomas, senior economist at Lloyds Bank. "Given last week's testimony by Janet Yellen on the difficulties of assessing the true strength of the US economy in the face of recent weather related disruptions, attention will largely be focussed on Fischer's views on underlying economic momentum, as well as the appropriate pace of quantitative easing tapering," he adds.
By Jon Darby; [email protected]; @jondarby100
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