ADVFN Morning London Market Report: Wednesday 10 Feb 2016

Share On Facebook
share on Linkedin
Print

London open: Stocks gain ahead of Yellen’s testimony

© ADVFN

UK stocks rose on Wednesday as investors brushed off concerns about the health of the world’s economy and the state of the banking system.

Japan’s Nikkei was down 2.32% as the yen touched 15-month highs, making the country’s exports less competitive. Stocks have fallen to a 15-month low since the Bank of Japan’s announcement last month to push interest rates below zero.

European banks were also under pressure as worries over the strength of sector sparked fears about the prospect of a another global recession. Concerns were raised after the chief executive of Deutsche Bank was forced to reassure staff that the bank was “rock solid” and that it had “sufficient” reserves to make due payments this year on AT1 securities.

‘While it is easy to suggest that the current sell-off is an over-reaction where banks are concerned, confidence is everything, and as we know from 2008 once it is gone it is very difficult to get back,” said Michael Hewson, chief market analyst at CMC Markets.

“With economic growth showing signs of slowing, and interest rates already at record lows and in some case negative, the capacity for banks to build up resilience and improve their profitability is becoming that much more difficult, as central bankers around the world fumble around in the dark.”

Meanwhile, all eyes will be on Federal Reserve chair Janet Yellen’s testimony to US Congress at 1500 GMT. Markets will be looking for clues on when the Fed will next raise interest rates in light of the slowdown in economic growth.

In the UK, reports on industrial and manufacturing production will be in focus at 0930 GMT while the NIESR releases its latest GDP estimate at 1500 GMT.

On a positive note oil prices were sitting higher with Brent crude up 3.1% to $31.29 per barrel and West Texas Intermediate up 2.6% to $28.68 per barrel at 0921 GMT.

On the company front, Hikma Pharmaceuticals plunged as the cash consideration for its takeover of Roxane Laboratories almost halved on the back of significantly lower revenue projections.

ARM Holdings declined despite posting a strong set of full year results and saying it was confident of meeting forecasts for 2016 as demand for its microchip technology continues to grow.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20210419 13:04:07