Marketplace Update: Equity markets greater on expectations of eurozone offer

Report by City Index

Sean Power, Equity Analyst, at City Index, gives insight into the marketplace exercise that shaped spread betting and CFD trading on 17th October 2011:”The current equity industry rally continued this morning as investors remained optimistic of the eurozone deal nearing its conclusion. The FTSE has rallied all around eight% in the past two weeks with the CAC and DAX the two adding all around 15% in the final three weeks.

The FTSE is at present up 70 factors (+1.23%) at 5536.5, with BP primary the way aided by the heavily weighted mining stocks and the in-focus banking sector.

BP traded up to an early morning substantial of 440p, up +23p (5.3%), following an agreement with Anadarko Petroleum to settle all claims relevant to final year’s Deepwater Horizon accident. Terms of the agreement incorporate Anadarko having to pay BP billion and both events agreeing to cease claims against every single other. BP investors will also be buoyed by the UK government allowing BP and three partners to proceed with planned North Sea oil and fuel tasks.

Also in a buoyant mood this morning are the banking stocks, driven larger by a seemingly imminent worldwide eurozone agreement to stem the European debt crisis and address financial institution recapitalisation concerns. Barclays led the way, trading up 8p (+four.5%) to 184p, closely followed by RBS, up four.three% to 25.3p and Lloyds at 34.2p, up 2.96%.

In early trading mining stocks assisted to push the FTSE to a ten-week high but have since eased a minor with Rio trading up 113.5p (three.four%) at 3459p, Kazakhmys up +30p (3.three%) to 930p and Xstrata up 21p (2.24%) to 996p. The latter is trading positively ahead of its Q3 2011 sales and revenue release due tomorrow morning.

With minor macro information due out from Europe this morning, today’s early session ought to remain fairly quiet with volatility waning in recent days. Investors across Europe, and past, are awaiting an announcement with regards to the planned, coordinated action to curtail the European debt crisis. For most the devil will be in the detail, but given the activity we have seen this morning investors are nonetheless pleased to be getting fiscal stocks irrespective of their recent extraordinary moves. Traders are hoping that European powers have formulated a plan to cure the condition that has gripped Europe, but I would advise caution as at first glance the medicine may possibly offer with the symptoms instead than the condition.”

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