FTSE 100 Spread Betting Market Weakens Ahead of 2011 Year End
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 30 December 2011: 11.30am Update
It is yet another half day for London markets, as the old year draws to a close. Those hoping for a bright finish for the London market will have been disappointed by the start to trading this morning, with the FTSE 100 losing ground slightly.
By 11.30am (London time), the FTSE 100 was down 0.4% at 5545.38, but the FTSE 250 managed to remain in the black, with a gain of 0.13% to 10,069.2.
China manufacturing still weak
Most of this brief week of trading has been focused on Italy, as it auctions off government debt, but today attention has shifted to China, where an index of manufacturing indicated a contraction in activity for the second successive month.
The index, maintained by HSBC, stood at 48.7 for December, slightly above the 47.7 for November, but the improvement was not enough to suggest that the situation is showing real improvement.
A slowing down in the Chinese economy is the worry that lurks in the background, even as global markets focus on the Eurozone crisis. The strength of China has been a reassuring prop for financial spread betting markets, and if this comfort blanket is removed then the last vestige of confidence could easily disappear.
Italy sees light at end of the tunnel
Back in Europe, Italian Prime Minister Mario Monti has declared that the country has pulled itself back from the brink. Mr Monti said that, under more ‘normal conditions’, Italian borrowing costs would not be so high. However, he declined to define what would constitute more normal conditions.
He also called on the EU to increase the size of the rescue fund, a measure that would provide a degree of reassurance for nervous spread betting investors.
As the final day of trading for 2011 winds down, we end the year in a disturbingly similar place to where we started. No solution has been found for the crisis, and Italy and Spain remain the next countries in line for a bailout if this crisis worsens.
Miners up, banks down
Back in Europe, Italian Prime Minister Mario Monti has declared that the country has pulled itself back from the brink. Mr Monti said that, under more ‘normal conditions’, Italian borrowing costs would not be so high. However, he declined to define what would constitute more normal conditions.
He also called on the EU to increase the size of the rescue fund, a measure that would provide a degree of reassurance for nervous spread betting investors.
As the final day of trading for 2011 winds down, we end the year in a disturbingly similar place to where we started. No solution has been found for the crisis, and Italy and Spain remain the next countries in line for a bailout if this crisis worsens.
US pre-market
With only the US purchasing managers’ index for December out at 3pm (London time), the economic calendar for the end of the year is fairly light. US futures are mixed, with the Dow Jones down 19 points but the S&P 500 up 1.7 points.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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"FTSE 100 Spread Betting Market Weakens Ahead of 2011 Year End" last update by AG, 30-Dec-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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