Equities reverse lower on a volatile session

Thursday, April 10, 2014

European equities gave back recent gains and retreated today, following a fairly volatile trading session. Investors remained cautious after the US Federal Reserve Bank indicated yesterday it would keep interest rates at fairly low levels for longer than initially anticipated. The CAC, DAX and IBEX declined by 0.54% and 1.4%, while the London equity index ended fairly unchanged on the day.  

On the macroeconomic front, we received fairly disappointing economic data from China as  imports declined sharply by 11.3% in March against estimates of a small 2.4% rise, while exports also fell by 6.6% versus estimates of a 4.0% increase. In the UK, the Bank of England kept interest rates unchanged at 0.5%, as widely expected. In the US, weekly jobless claims fell to 300,000 to reach its lowest level since May 2007. Investors’ attention will turn to the release of the US Federal Budget details, which could provide an insight regarding the current US economic conditions and prospects.    

US Jobless claims weekly

INJCJC Index (US Initial Jobless 2014-04-10 17-13-33

In commodities, base metals prices extended gains in today’s trading session, mainly supported by a weaker US dollar. LME Aluminium continued its strong uptrend, trading above $1890 towards the key level of $1900, while copper rebounded to retest $6650.

In London, gains in financial and healthcare stocks offset any losses in mining and utility companies. Land Securities and British Land surged by 2.85% and 1.06%, respectively, while HSBC also posted strong gains, closing 1% higher on the day.  

Tomorrow, investor attention will turn to the release of CPI data from China and Germany as well as the results of the University of Michigan/ Thomson Reuters survey regarding the current US market sentiment and expectations.

LME Aluminium

LMAHDS03 Comdty (LME ALUMINUM  3 2014-04-10 17-12-17

 

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