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Reports UK

UK stock market commentary (April 10, 2014)

April 10, 2014, Thursday, 05:44 GMT | 01:44 EST | 10:14 IST | 11:44 SGT
Contributed by Capital Spreads

European equities are set to show modest gains on the open due to a dovish FOMC Meeting minutes overnight. The minutes confirmed that Janet Yellens “six months” comment about the first rate hike were a slip of the tongue. Although we will see a bit of a pop higher, this merely means the markets expectations and the Feds efforts at forward guidance are back inline so not really anything new to rally strongly on.

Technology shares led the rally in the US stocks in early trading yesterday with Alcoa also seeing a sharp increase for its price (3.8%). Later on when the Fed released last meetings’ minutes, it eased some of the previous worries regarding the timing of the interest rate hikes. So, the climb accelerated with the Dow Jones ending 193 points up at 16,441.

As Federal Reserve officials said that earlier projections for an interest rate rise have been overstated, the dollar was hurt as the QE may in fact be prolonged. The shared currency rose for the third straight session versus the greenback, closing 60 pips up at 1.3855.

The WTI crude prices gained $1.10 yesterday to $103.44 as the US Department of Energy indicated in its weekly inventories report a strong demand for gasoline with stockpiles more than estimated. Meanwhile, a slowdown in Chinese economy failed to stop oil prices from rising.

Gold prices edged higher yesterday gaining $3.8 to $1312.3 after dropping in the first part of the trading session. Support was undoubtedly provided by the Fed policy makers who admitted they are not as hawkish as previously thought.