Indices Spread Betting Markets Slip as European Debt Deal Struggles
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 15 December 2011: 5.00am Update
US and European markets declined after Italy’s borrowing costs surged to a euro-era record at an auction.
Worries about escalating borrowing costs for Europe resulted in an onslaught on risk assets, with significant moves in the currencies and commodities space. Again, Germany seems to have its foot held firmly down on the ‘risk-off’ pedal, with both Angela Merkel and Bundesbank head Mr Weidman suggesting that increased bond buying by the ECB is not going to happen anytime soon.
Among the major averages, the Dow Jones Industrial Average lost 1.1% to 11,823. The S&P declined 1.1% to 1212 and the NASDAQ shed 1.6% to 2539.
Asia
Across Asia, regional markets are weaker after picking up a negative lead from the US and Europe.
It was a night of clear risk aversion, with traders simply fearing slower economic growth globally. With no key dates to get excited about, hope seems to be dissipating. Rising European borrowing costs did not help the situation. Sentiment around the region has also been dampened by some economic data out of China and Japan.
China’s HSBC flash manufacturing PMI number came in at 49 (below the key 50 level and in contractionary territory) and Japan’s tankan index fell to -4, which was below expectations.
The resource-heavy ASX 200 is leading the broad-based declines, with a 1.5% drop after a poor night for commodities. Elsewhere in the region, the Nikkei and Shanghai Composite are both down 1.3%. US and European markets are pointing towards a relatively flat open, with potentially slight gains for Europe.
Australia
Australia's S&P/ASX 200 index is down 1.5% at 4127, as concern about France's credit rating caused risk aversion in global spread betting markets. Resources are leading broad-based declines, with BHP Billiton and Rio Tinto down over 2% each, while Fortescue Metals is nearly 4% lower.
Gold stocks are among the worst performers in the materials sector, with Newcrest Mining losing 3.5% after gold slipped overnight.
In the energy space, Woodside Petroleum has dropped just over 2% after a sharp decline in oil prices overnight. Consumer discretionary stocks and property trusts are outperforming, with Ten Network up 5.4% and Westfield half a percent higher.
On the economic front, traders will be looking out for UK retail sales and consumer inflation expectations data. Retail sales are expected to show a 0.3% fall. There is also CBI industrial order expectations data to look out for.
Ahead of the European open we're calling the FTSE up 8 at 5375, the DAX up 14 at 5689 and the CAC up 6 at 2982.
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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"Indices Spread Betting Markets Slip as European Debt Deal Struggles" last update by AG, 15-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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